Cryptocurrency exchange Binance suspended deposits and withdrawals after a security breach sent billions in digital assets flowing from its wallets. Stablecoin issuers Tether and Circle rushed to freeze billions of dollars in tokens, while the wider crypto market and broader stock indexes tumbled on the news.
Binance Investigates Security Breach That Drains Billions
Binance halted all customer deposits and withdrawals while investigating a massive security incident that drained wallets across multiple blockchains. The suspected breach prompted immediate emergency measures across the digital asset industry as investigators scrambled to trace funds. The exchange stated online that it would cover all losses
resulting from the event, according to updates posted on social media.
Initial blockchain tallies cited by Yahoo indicated that at least $5.57 billion left wallets linked to the trading platform across three blockchains. Blockchain security firm Chainalysis later estimated the stolen sum at $5.912 billion.
Our teams are aware of reports of a potential security issue and are actively investigating. At this stage, we have not confirmed any impact to user funds.Our security teams are reviewing all relevant information with urgency, and we will provide updates through official… pic.twitter.com/dN76yhzYM0
Arkham Intelligence linked nearly $6 billion in digital assets to 55 wallet addresses associated with the potential exploit. The preliminary asset breakdown circulating among blockchain trackers includes $1.45 billion in Bitcoin. It also includes $875 million in Ethereum, $234 million in TRON, $1.57 billion in Tether, $823 million in USD Coin, $50 million in Tether Gold, $75 million in Wrapped Beacon ETH, $88.5 million in Ripple USD, and approximately $447.5 million in other cryptocurrencies. Binance Alpha trading was temporarily suspended as security checks continued. The first Ethereum transaction moved 167,464 ETH to a brand-new address at 20:24 UTC. That transaction also included 63 token transfers alongside 1.615 billion USDT following a Tornado Cash-funded address that submitted a delegation for a Binance hot wallet using EIP-7702.
Stablecoin Issuers Freeze Billions in Assets
Major stablecoin issuers and decentralized finance protocols moved swiftly to restrict movement of the compromised funds. Tether chief executive officer Paolo Ardoino announced on X that his firm froze more than $1.5 billion of its USDT stablecoin related to a potential Binance exchange hack
as reported by Straitstimes. Concurrently, Circle Internet Group leader Jeremy Allaire confirmed that his company froze over $800 million in USDC.
Circle is closely tracking reports of a potential exploit involving Binance. In coordination with law enforcement, we have frozen more than 800M USDC associated with the incident and will continue supporting the investigation.
Circle chief executive Jeremy Allaire stated that his firm was closely tracking reports of a potential exploit involving Binance. His company coordinated with law enforcement to freeze more than $800 million in assets linked to the incident. Tether CEO Paolo Ardoino noted that protecting the industry and partners is a main priority, mentioning that his company issued a cryptocurrency known as USDT and froze around $1.6 billion. World Liberty Financial froze $27 million associated with the Binance hack. Binance co-founder Yi He noted that World Liberty Financial also froze $2 million worth of WLFI. Yi He additionally stated that Ripple helped halt the movement of $200 million linked to the possible attack. Circle, Tether, Ripple, and World Liberty Financial have all helped freeze millions in stablecoins.
Additional freezing actions rolled in from across the decentralized finance ecosystem. The Arbitrum Security Council executed a transaction to freeze $30.5 million involving Arbitrum tokens and Ether, operating without impacting regular users or applications according to Cointelegraph. Binance later clarified that the verified total of frozen assets across all partners reached $3 billion.
Markets and Executives React to the Security Incident
The security alerts triggered immediate selling pressure across cryptocurrency markets. Bitcoin dropped below $79,000, hitting its lowest level since September, while other tokens experienced sharp declines. Traditional markets also reacted, with the Nasdaq 100 tech index sliding nearly 1.4% during the session.
It does look like a hack on Binance.
Changpeng Zhao, co-founder and major shareholder of Binance
Changpeng Zhao, who no longer runs the exchange but remains a majority shareholder, addressed the situation publicly while maintaining that customer funds remained safe according to CNBC. Binance representatives emphasized that security teams were reviewing all data with urgency and promised a full post-mortem investigation once asset tracing concludes.
1/4 EIP-7702 can turn the wallet itself into the sweeper.A Binance-labeled wallet moved 167,464 ETH + 63 tokens, including 1.615B USDT, just 3m24s after a signed delegation was installed.This is bad.https://t.co/GrvUiya16D pic.twitter.com/zONu8cwW63
Binance founder and former CEO Changpeng Zhao stated in a post on X that user funds were safe and that he expected all customer funds to be fully covered. Binance reiterated in its online statements that user funds are completely safe and that it had not confirmed any impact to user funds while actively investigating the potential security issue. Tian Zeng, chief executive officer of crypto hedge fund Third Eye, remarked that consistent successful hacks cause huge damage to crypto.
User funds are safe!It does look like a hack on Binance. Appreciate the quick freeze from Tether (~$971m) and Circle (~$823m).I don't manage Binance (.com) anymore, but as a shareholder, I expect all user funds will be fully covered. https://t.co/oufpyNChxI
More on Binance
We are aware of differing figures circulating publicly regarding the amount frozen, including references to $1.8 billion.For clarity, the current verified total frozen is $2.54 billion. This figure may continue to increase as our teams work closely with law enforcement,… pic.twitter.com/Kx68qptfXk