Binance freezes USD 3 billion after potential security breach

Binance security breach triggers USD 3 billion freeze, deposits and withdrawals suspended

New Delhi, October 30

In a series of updates on its official X account, Binance said its security teams were reviewing the incident and tracing affected assets, while assuring users that their funds remained safe.

"Our teams are aware of reports of a potential security issue and are actively investigating. User funds are completely safe," the exchange said in its initial update.

Binance subsequently announced that withdrawals would resume once the security issue was fully resolved. It also temporarily suspended trading on its Binance Alpha platform as a precaution, stating that trading would resume after the issue was resolved.

The exchange initially confirmed that the verified amount of frozen assets had reached USD 2.54 billion, before revising the figure to around USD 3 billion in a later update.

"This figure may continue to increase as our teams work closely with law enforcement, issuers, blockchain intelligence firms and industry partners to trace and freeze additional assets," Binance said.

In its latest communication, the exchange said all deposits and withdrawals had been temporarily suspended while security checks continued. It also promised to publish a detailed account of the incident after the investigation.

"We are working non-stop to resolve this issue. Binance will cover all losses," the exchange said, adding that it was working around the clock and would share a full post-mortem once the investigation was complete.

The incident also weighed on cryptocurrency markets. Bitcoin fell 4.26 per cent to Rs 77.96 lakh at the time of filing this report, while the Nasdaq CFD was down 1.42 per cent at 26,173.45.

According to Reuters, Bitcoin had earlier dropped around 2 per cent to a six-week low of USD 77,646, while Ether declined around 2 per cent to a two-month low of USD 2,238.76 in early Asian trading.

Stablecoin issuers Tether and Circle also froze assets linked to the incident. In a separate post on X, Tether CEO Paolo Ardoino said, "Tether froze more than 1.567B USDT related to a potential Binance exchange hack."

Circle CEO Jeremy Allaire said the company had frozen more than 800 million USDC associated with the incident in coordination with law enforcement.

Binance co-founder Changpeng Zhao also said, "It does look like a hack on Binance," while adding that he expected all user funds to be fully covered. Zhao, who goes by CZ, no longer runs the company but remains its largest shareholder.

The exact cause and scale of the potential breach have not yet been confirmed. Binance said it would provide further verified updates as the investigation progresses.

— ANI