Binance halts withdrawals as suspected hack spurs crypto sell-off, vows to ‘cover all losses’

[NEW YORK] Binance, the world’s largest crypto exchange, said US$6.3 billion of funds are involved in what the industry is describing as crypto’s biggest-ever hack. Digital tokens fell.

“The estimated total impact sits at around US$6.3 billion,” Binance said in a post on X. “We have worked with blockchain partners to freeze affected assets, with ~US$3 billion frozen on-chain so far.”

Binance has temporarily suspended all withdrawals, which it expects to resume within 48 hours, co-founder Yi He said in a post on X. The company said it will cover all losses and “user funds are safe.”

Blockchain intelligence firm TRM Labs said North Korea was behind the heist, which it called “the largest crypto theft on record.”

“TRM attributes the attack to TraderTraitor, North Korea’s elite hacking unit, based on robust on and off-chain intelligence,” the firm said. “We make this judgment with high confidence.”

Before now, the biggest publicly known crypto hack occurred at exchange Bybit in February 2025, in which attackers made off with almost US$1.5 billion of tokens. For crypto faithful who’d been basking in a two-month-long price rebound, the Binance incident is a potential setback.

Notorious previous episodes of theft and fraud among fallen crypto giants such as FTX and Mt. Gox set the stage for protracted bear markets, bruises the industry has worked to put behind it in US President Donald Trump’s promised new era of regulatory clarity for cryptocurrencies.

Bitcoin dropped 3 per cent at the end of the US session and a further 3 per cent in Asia trading, falling below US$77,000 to its lowest level since September, with other tokens also selling off.

“The rumored Binance hack is definitely driving down coin prices,” said Fredrick Collins, chief executive and co-founder of crypto data platform Velo Data. “Binance is such a behemoth in crypto that any hit to confidence in them is a hit to confidence in the industry as a whole, especially as people have already been skittish over the increasing cyber capabilities of AI.”

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The hackers appear to have exploited how Binance authorises transactions, according to TRM. They seemingly gained access to the exchange’s systems and used internal software to authorise transfers across 10 different blockchains, including Bitcoin and Ethereum, it said.

Binance said the incident may involve a compromised software engineer’s laptop. “We have found no evidence of any wallet private key leak,” the company said.

An emergency insurance and reserve fund from Binance called the Secure Asset Fund for Users (SAFU) was established in 2018 to serve a backstop for customers in “extreme situations,” according to the exchange.

The SAFU is generally maintained at around US$1 billion, but has fluctuated in the past in tandem with market movements, Binance said in 2024.

The two biggest stablecoin issuers said they took steps to freeze missing currency. Paolo Ardoino, the chief executive officer of Tether, said in an X post that it froze more than US$1.5 billion of the stablecoin “related to a potential Binance exchange hack.”

Jeremy Allaire, who runs Circle Internet Group, said US$800 million of its coin had been frozen amid “reports of a potential exploit involving Binance.”

Sentiment was already fragile after a spate of crypto security incidents. In recent months, hundreds of millions of dollars were drained from Bitget, while tampering tied to Ledger devices also led to millions of dollars in losses. 

“Attackers are operating at unprecedented speed and scale” but “the tools to track and trace operate at that speed too,” said Ari Redbord, global head of policy at TRM Labs. “Stablecoin issuers freeze within hours. Investigators follow funds across chains in real time.”

Traders had already been bracing for greater volatility in the crypto market this week, with US$11 billion in options set to expire on Friday.

This comes days ahead of the US midterm elections taking place next week, when Democrats could potentially retake one or both chambers of Congress and open the door to greater regulatory scrutiny for the industry.  

Exchange thefts and malfeasance have been an ever-present backdrop of crypto’s almost two-decade ascent, the most famous of which was the collapse of Sam Bankman-Fried’s FTX in November 2022.

In what remains perhaps the most notorious hacking incident, Japan-based Bitcoin exchange Mt. Gox was struck in 2011. Over time, the hackers made off with tokens worth billions of dollars based on the current market price. Mt. Gox eventually went bankrupt.

“It’s a huge damage to crypto because of the consistent successful hacks in the space,” said Tian Zeng, chief executive officer of crypto hedge fund Third Eye. “The fact that exploits keep happening makes it dangerous in the age of newest AI models being released every two weeks.”

The Binance incident came on the same day event-contract venue Polymarket halted trading on its international exchange for an hour after it said that a third-party software provider was compromised.

More than 700 Polymarket users were drained of US$2.7 million in funds, said blockchain analytics platform Bubblemaps, in a post on X. A spokesman declined to comment on the numbers.

Recent security incidents haven’t been confined to crypto firms. South Korea’s Daishin Securities disclosed a data leak affecting about 38,000 customers this week, and Mirae Asset Global Investments reported a hacking incident, Yonhap reported.

In Japan, hackers on Tuesday threatened to release data of traders using a GMO Internet Group cloud service for foreign-exchange trading. BLOOMBERG