Binance, the world's largest cryptocurrency exchange, has frozen $3bn in crypto assets as it investigates a potential security breach. Stablecoin issuers Circle and Tether have also frozen related assets. The incident has sent shockwaves through the cryptocurrency market, with Bitcoin and Ether experiencing significant drops in value. Binance co-founder Yi He assured that the exchange would cover all hacking losses, but details about the incident remain scarce. The market impact was felt immediately in early Asian trading on Friday.
The possible hacking, which could be the largest-ever crypto heist according to analytics firm Chainalysis, has sparked concerns about the security of cryptocurrency exchanges. Bitcoin dropped about 2% to a six-week low of $77,646, while Ether fell around 2% to a two-month low of $2,238.76. BNB, a token originally launched as Binance Coin, was down more than 8% over the past 24 hours at $694. Other cryptocurrency-related stocks, including Coinbase Global and Strategy, also experienced significant declines. The incident has raised questions about the vulnerability of cryptocurrency exchanges to hacking.
Binance co-founder Changpeng Zhao, who no longer runs the company, said in a post on X that the incident "looked like a hack." Binance has more than 335 million registered users globally and had about $160 billion in assets under custody as of the exchange's 2024 annual report. The exchange runs a secure asset fund for users, which is a reserve held entirely in bitcoin intended to protect user assets in cases of security breaches. Despite this, the incident has sparked concerns about the security of user funds. Binance said it was conducting security checks and would resume withdrawals once the issue was fully resolved.
Tether said it had frozen nearly $1.57 billion in assets linked to the incident, while Circle froze more than $800 million. Binance said the amount frozen could increase as it worked with law enforcement agencies, token issuers, blockchain intelligence firms, and other industry partners to trace and freeze additional assets. The exchange temporarily suspended trading on its Binance Alpha platform as a precaution. User funds remained safe, and teams were reviewing the incident. The incident has highlighted the need for greater security measures in the cryptocurrency industry.
World Liberty Financial, a crypto company linked to US President Donald Trump and his family, said it had worked with cryptocurrency custodian BitGo to freeze funds stolen in what it described as a Binance hack. Binance's Yi said $27 million in stablecoins and about $2 million worth of World Liberty tokens had been frozen. Crypto firm Ripple also froze roughly $200 million in funds, according to Yi. The incident has sparked a coordinated response from the cryptocurrency industry to prevent further losses.
The incident adds to a string of crypto thefts, with attackers stealing $2.9 billion worth of cryptocurrency across nearly 150 attacks last year, according to researchers at TRM Labs. In September, cryptocurrency exchange Bitget said roughly $350 million in crypto had been stolen from its platform. Authorities have warned that organised crime groups are increasingly using cryptocurrencies to move funds across borders outside the traditional financial system. The incident has highlighted the need for greater security measures and cooperation between cryptocurrency exchanges and law enforcement agencies.
Binance.US, a separate cryptocurrency exchange, said it was not affected by the security incident. Coinbase said it was unaffected and was monitoring the situation. In an unrelated incident earlier on Thursday, prediction market operator Polymarket temporarily halted trading after a security incident involving a third-party provider. It later resumed trading and said it would fully reimburse affected traders. The incident has sparked concerns about the vulnerability of the cryptocurrency industry to hacking and the need for greater security measures.
Key points
- Binance freezes $3bn in crypto assets amid potential security breach
- The incident has sparked concerns about the security of cryptocurrency exchanges and the vulnerability of the industry to hacking
- Tether and Circle have frozen assets linked to the incident, with Tether freezing nearly $1.57 billion and Circle freezing more than $800 million.
