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Suspected hack: Binance, world's largest crypto exchange, suspends all deposits and withdrawals
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Binance, the world's largest cryptocurrency exchange, suspended all deposit and withdrawal services on Oct. 30 and is investigating a security incident. The company said more than $2.5 billion in assets had been frozen, and a suspected hack triggered sharp declines in prices of various digital tokens. Binance said on X that it is doing everything possible to resolve the issue and will bear all losses.
Binance said that as a precautionary measure, all deposits and withdrawals were temporarily suspended while its team conducts security checks, freezes funds, and cooperates with law enforcement investigations. The company disclosed that about $2.54 billion in assets is currently frozen, but that figure could continue to rise. Co-founder Changpeng Zhao said the exchange may have been hacked but expects all user funds to be fully reimbursed; he no longer oversees day-to-day operations but remains Binance's largest shareholder.
Online forums are full of speculation about the scale of the losses and the attack method, none of which has been confirmed. Blockchain tracking platform Arkham detected that wallets linked to the suspected hacker hold about $5.9 billion in digital assets, but that amount does not equal the amount stolen from Binance. Market rumors quickly spread to trading, with Bitcoin falling below $77,000 to a new low since September, and other tokens also sold off; U.S. stocks closed lower, with the Nasdaq 100 Technology Index down nearly 1.4%.
Frederick Collins, CEO of Velo Data, said the rumored Binance hack is unquestionably weighing on cryptocurrency prices. He said Binance is so large that a blow to market confidence in it is equivalent to a blow to confidence in the entire industry, especially at a time when people are already concerned about the growing cyberattack capabilities of artificial intelligence. Investors had been optimistic after Wall Street institutions increased their exposure and token prices rebounded over two months, and this incident is likely to interrupt that momentum.
The two leading stablecoin issuers said they had taken action to freeze funds involved. Tether CEO Paolo Ardoino said more than $1.5 billion in stablecoins had been frozen and that the funds were "related to the suspected hack at the Binance exchange." Circle CEO Jeremy Allaire said that because "reports emerged that Binance suffered an exploit," $800 million worth of the company's stablecoins had been frozen.
James Seyffart of Bloomberg Intelligence said theft of funds from hot wallets is not new in the crypto industry, but a hack of this scale at a top exchange cannot be underestimated. In recent months, hundreds of millions of dollars in assets were stolen from the Bitget platform, and a tampering incident related to Ledger hardware wallets caused millions of dollars in losses. Binance's emergency insurance reserve fund, the Secure Asset Fund for Users (SAFU), was established in 2018 to provide a backstop for user assets under "extreme circumstances"; Binance said in 2024 that the fund typically maintains a size of about $1 billion.
Traders had already been bracing for significant volatility in crypto markets this week, with $11 billion in options set to expire on Friday. In a few days, the U.S. midterm elections will be held, and Democrats could retake control of one or even both chambers of Congress, which could push the industry toward stricter regulatory scrutiny. Zeng Tian, CEO of crypto hedge fund Third Eye, said the relentless success of hackers is causing enormous damage to the crypto industry; a new generation of AI models is released every two weeks, yet exploit attacks continue to emerge one after another, making the sector increasingly risky.
On the same day, prediction trading platform Polymarket announced that its international exchange suspended trading for one hour because a third-party software service provider had been compromised. Blockchain analytics platform Bubblemaps said more than 700 Polymarket users had collectively been stolen from, with $2.7 million in funds taken, and a spokesperson for the platform declined to comment on that amount.
