Binance Freeze Hits $6.3 Billion

Changpeng Zhao, the founder of the world's largest cryptocurrency exchange, stated on Thursday that the incident at Binance "does look like a hack on Binance." The admission came hours after the company reported a potential security issue that has impacted more than $6 billion in assets. Binance is currently investigating the breach, which it attributes to a compromised DevOps engineer's laptop that gave an attacker access to a service container.

The exchange suspended all deposits and withdrawals on Thursday while its teams worked around the clock to resolve the issue. In a statement, a Binance spokesperson assured users that their funds are "completely safe" and said the company is reviewing all relevant information with urgency. The company noted it has found no evidence of any wallet private key leak, suggesting the unauthorized withdrawal transactions were the primary vector for the loss.

Binance posted on its X account that the estimated total impact sits at around $6.3 billion. The company said it has worked with blockchain partners to freeze affected assets, with roughly $3 billion frozen on-chain so far. Binance indicated it will share more technical details once the investigation is complete and the facts are fully verified.

Stablecoin providers reacted quickly to the news. Tether and Circle each froze funds in response to the incident. Jeremy Allaire, co-founder and CEO of Circle, wrote on X that his company froze the equivalent of more than $800 million in currency associated with the incident. He noted this action was taken in coordination with law enforcement.

Paolo Ardoino, CEO of Tether, said on X that his company froze the equivalent of more than $1.5 billion in currency related to what he called a potential Binance exchange hack. These freezes are part of a broader effort by industry partners to trace and freeze additional assets while law enforcement investigates the breach.

The news sent ripples through the market. The price of bitcoin dropped 3.2 percent on Thursday evening, falling to under $79,000. The volatility followed the initial reports of the security issue, which Binance said involved unauthorized withdrawal transactions submitted by an attacker who had gained access to a service container via a compromised laptop.

Zhao, who stepped down as CEO in 2023 after pleading guilty to a felony related to money laundering prevention, posted on X that "User funds are safe!" He added that although he no longer manages the company, he expects all user funds to be fully covered as a shareholder. Zhao was released from prison last year after being sentenced for violating the Bank Secrecy Act.

Zhao was the first person ever sentenced to prison time for violations of that law, which requires U.S. financial institutions to know their customers, monitor transactions, and file reports of suspicious activity. Prosecutors stated that no one had violated the regulations to the extent Zhao did. He and Binance have been key supporters of some of the Trump family's crypto enterprises.

Binance stated it will work closely with law enforcement, issuers, blockchain intelligence firms, and industry partners to trace and freeze additional assets. The company emphasized that it will provide updates through official channels as soon as it has verified information. The suspension of deposits and withdrawals remains in effect as security checks continue.