Binance, the world's largest cryptocurrency platform, announced on Thursday the freezing of $3 billion in crypto assets during an investigation into a potential security breach. Consequently, related assets belonging to stablecoin issuers Circle and Tether were also frozen.
Binance co-founder Yi He stated that 'Binance will cover all losses from the hack,' but provided no further details about the incident. The impact of this potential hack, which the analytics firm Chainalysis considers potentially the largest crypto heist in history, was immediately felt during early trading in Asia on Friday.
As a result of the incident, Bitcoin dropped by approximately 2%, reaching a six-week low of $77,646, while Ethereum fell about 2% to a two-month low of $2,238.76. The BNB token, originally launched as Binance Coin for paying Binance fees, lost over 8% in the last 24 hours, settling at $694, according to the market aggregator CoinGecko. The cryptocurrency exchange Coinbase Global slipped by 4.8%, and the Bitcoin buyer exchange Strategy fell nearly 6% during extended trading in the US.
Binance clarified that the amount of frozen funds may increase as the company collaborates with law enforcement agencies, token issuers, blockchain analytics firms, and other industry partners to track and block additional assets. Binance co-founder Changpeng Zhao, who no longer leads the company, stated in an X post that the incident 'resembles a hack.'
Binance, which allows users to buy, sell, and trade digital assets, has over 335 million registered users worldwide and held approximately $160 billion in assets under custody as of its 2024 annual report.
Binance Maintains a Protected Asset Fund
According to the Binance website, the exchange manages a protected asset fund for users. This reserve consists entirely of Bitcoin and is intended to safeguard user assets in the event of security breaches. Bernardo Brites, CEO of Trace Finance, a company specializing in payment and stablecoin infrastructure, noted that 'it is becoming very difficult to resist hacks because AI can find vulnerabilities faster than you can fix them.' He added that he believes users will start leaving smaller and medium-sized exchanges because 'it is too risky to keep your money where they cannot cover a significant hack.'
Tether reported freezing assets related to the incident worth nearly $1.57 billion, while Circle froze over $800 million. Binance stated that it is conducting security checks and will resume withdrawals after the issue is fully resolved, emphasizing that user funds remain safe while teams investigate the incident. As a precautionary measure, the exchange also temporarily suspended trading on its Binance Alpha platform.
World Liberty Financial, a crypto company associated with US President Donald Trump and his family, announced on Thursday that it had cooperated with cryptocurrency custodian BitGo to freeze funds stolen in what they termed the Binance hack. According to Yi from Binance, $27 million in stablecoins and about $2 million in World Liberty Financial tokens were frozen. Additionally, the crypto firm Ripple froze approximately $200 million in funds. Jack McDonald, Vice President of Stablecoins at Ripple, stated that the company is closely monitoring reports of a possible exploit related to Binance and is freezing affected funds while coordinating with relevant parties.
Incident Adds to String of Crypto Heists
Miguel Morel, CEO of blockchain analytics firm Arkham, reported that data suggests billions of dollars may have been stolen from Binance by an unknown perpetrator, although the exact cause has not yet been confirmed. Morel noted that the incident began around 4:30 PM EDT (8:30 PM GMT) and apparently continued. This case joins a series of crypto heists. According to researchers at TRM Labs, attackers stole $2.9 billion in cryptocurrency in almost 150 attacks last year. In September, the cryptocurrency exchange Bitget reported a theft of approximately $350 million from its platform, highlighting the industry's vulnerability to hackers.
Authorities warn that organized crime groups are increasingly using cryptocurrencies for cross-border fund transfers outside the traditional financial system. Binance.US, a separate cryptocurrency exchange, stated that it was not affected by the security incident. Coinbase also stated that it was unaffected and is monitoring the situation. In an unrelated incident earlier on Thursday, the prediction market operator Polymarket temporarily suspended trading following a security incident involving a third-party provider but later resumed trading and promised to fully compensate affected traders.