Cryptocurrency exchange Binance has frozen digital assets worth over $2.5 billion following a suspected security breach. The company suspended all deposits and withdrawals on Thursday as it investigates the issue and works with law enforcement. Changpeng Zhao, Binance’s former CEO and majority shareholder, stated, “It does look like a hack on Binance.” The frozen assets include approximately $800 million held by Circle, the issuer of the USDC cryptocurrency, and around $1.7 billion frozen by Tether, another crypto platform.
Binance stated it will cover all losses and is working to trace and seize additional assets, adding that the amount of frozen funds may increase. The price of Bitcoin fell approximately 5 percent following the incident, dropping below $77,000. Circle CEO Jeremy Allaire said his firm is “closely tracking reports of a potential exploit involving Binance.” Tether did not immediately respond to a request for comment.
Zhao, who stepped down as CEO in 2023, expects all user funds to be fully covered. Binance, the world’s largest crypto exchange by daily trading volumes, has assured users their funds are safe and urged caution against scams, directing them to rely on official Binance channels for updates.
Our reading is that Binance is facing a significant, potentially damaging security incident, as evidenced by the freezing of over $2.5 billion in assets and the company’s admission of a suspected hack. The involvement of major crypto platforms like Circle and Tether suggests the breach may be widespread, and the resulting price drop of Bitcoin indicates market concern. Despite the seriousness of the situation, Binance appears to be attempting to mitigate the damage by freezing funds and promising to cover losses.
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