Binance’s possible hack triggers $3bn freeze in crypto assets

"Binance will cover all hacking losses," Binance co-founder Yi He said, without providing more details about the incident.

The market impact of the possible hacking, which could be the largest-ever crypto heist according to analytics firm Chainalysis, was felt immediately in early Asian trading on Friday.

Bitcoin BTC= dropped about 2% to a six-week low of $77,646 and ether ETH= fell around 2% to a two-month low of $2,238.76. BNB BNB=CCCL, a token originally launched as Binance Coin that can be used to pay Binance fees, was down more than 8% over the past 24 hours at $694, according to market aggregator CoinGecko.

Crypto exchange Coinbase Global COIN.O slid 4.8% while those of bitcoin buyer Strategy MSTR.O fell nearly 6% in extended US trading.

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.

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, which allows users to buy, sell and trade digital assets, 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.

BINANCE HAS SECURE ASSET FUND

Binance runs a secure asset fund for users, according to its website, which is a reserve held entirely in bitcoin that is intended to protect user assets in cases of security breaches.

"It's becoming very hard to counter hacks as AI can find vulnerabilities faster than you can fix them, said Bernardo Brites, CEO of Trace Finance, a payments and stablecoin infrastructure company.

"My view is that users will move away from smaller and medium-sized exchanges, (it is) becoming too risky to park your money somewhere that couldn't cover a hack of meaningful size."

Tether said it had frozen nearly $1.57 billion in assets linked to the incident, while Circle froze more than $800 million.

Binance said it was conducting security checks and would resume withdrawals once the issue was fully resolved. It added user funds remained safe and that teams were reviewing the incident.

The exchange also temporarily suspended trading on its Binance Alpha platform as a precaution.

World Liberty Financial, a crypto company linked to US President Donald Trump and his family, said on Thursday 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, Yi said. Jack McDonald, senior vice president of stablecoins at Ripple, said the company was closely monitoring reports of a potential exploit involving Binance and was freezing affected funds and coordinating with relevant parties.

INCIDENT ADDS TO STRING OF CRYPTO THEFTS

Miguel Morel, CEO of blockchain intelligence firm Arkham, said data indicated that billions of dollars appeared to have been hacked from Binance by an unknown actor, though the exact cause had not been confirmed. Morel said the incident began around 4:30 p.m. EDT (2030 GMT) and appeared to be ongoing.

The incident adds to a string of crypto thefts. Last year, attackers stole $2.9 billion worth of cryptocurrency across nearly 150 attacks, according to researchers at TRM Labs. In September, cryptocurrency exchange Bitget said roughly $350 million in crypto had been stolen from its platform, underscoring the industry's vulnerability to hackers.

Authorities have warned that organised crime groups are increasingly using cryptocurrencies to move funds across borders outside the traditional financial system.

Binance.US, a separate cryptocurrency exchange, said it was not affected by the security incident.

Coinbase COIN.O 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.

(Reporting by Tom Westbrook and Ankur Banerjee in Singapore, Vallari Srivastava and Anusha Shah in Bengaluru and Mrinmay Dey in Mexico City; Writing by Scott Murdoch; Editing by Michelle Price, Sherry Jacob-Phillips and Jamie Freed)