More than $2 billion withdrawn from Binance wallets: exchange founder admitted the hack
On the evening of October 29, digital assets worth more than $2 billion were transferred from the hot wallets of the largest cryptocurrency exchange Binance. The unusual transactions raised suspicions of a large-scale hacker attack. Binance founder Changpeng Zhao said that the situation indeed looks like a hack, and stablecoin issuers have already frozen a significant portion of the moved funds.
This is evidenced by data from the blockchain explorer Etherscan, analyzed by the publication BeInCrypto. Zhao's reaction was reported by Bitcoin Sistemi, citing his post on X.
The suspicious operations began around 22:24 Kyiv time. From an address labeled as Binance 14 in the blockchain, 167,464 ETH and dozens of other cryptocurrency assets were transferred to a newly created wallet.
Among them were approximately $1.6 billion in USDT stablecoins, as well as RLUSD, wBETH, XAUt, UNI tokens, and other digital assets.
A few seconds later, another Binance hot wallet sent about 28,000 ETH to the same address.
According to analysts' estimates, the total value of the initially identified transfers exceeded $2.5 billion. Some blockchain monitoring systems estimated the volume of suspicious movements even higher—about $2.77 billion, taking into account operations in several networks.
At the same time, the transaction amount is not equivalent to the final extent of the damage: some funds could have been moved repeatedly between several addresses, and the exact volume of the possible theft has not yet been established.
Analysts found a connection with a cryptocurrency mixer
Special attention was drawn to the address involved in the suspicious operations. According to BeInCrypto, the funds to pay fees were transferred to it through Tornado Cash, a service that makes it difficult to trace the origin of cryptocurrency.
The recipient address was created shortly before the large-scale transfers. Within about 15 minutes after receiving the funds, approximately 195,000 ETH were moved from it to another new wallet.
On-chain analyst under the pseudonym Spreek suggested that the operations could be an ordinary technical redistribution of Binance reserves, but called the situation suspicious.
Monitoring service Tree News also warned of a possible compromise of the exchange's private keys.
In itself, the use of a new wallet or funds associated with Tornado Cash does not prove a hacker attack. Large cryptocurrency exchanges regularly transfer assets between their own addresses to manage liquidity and ensure user operations.
However, the scale of the movements and the nature of subsequent transactions caused concern among crypto market participants.
Part of the assets were frozen by Tether and Circle
Against the backdrop of reports of a possible hack, Binance founder Changpeng Zhao commented on the situation on the social network X.
According to Bitcoin Sistemi, Zhao confirmed that the incident is being treated as a hacker attack, and stated that user funds are safe.
He also thanked Tether and Circle for promptly freezing suspicious assets.
According to the data he provided, Tether froze about $971 million in USDT, and Circle about $823 million in USDC. Thus, the total amount of blocked stablecoins amounted to about $1.79 billion.
Blocking tokens means that they cannot be freely transferred from the relevant addresses. At the same time, freezing is not equivalent to the actual return of funds to Binance or its clients.
Zhao emphasized that he no longer manages the cryptocurrency exchange. According to him, as a shareholder of the company, he expects that any user losses will be fully compensated.
This statement should not be considered an officially approved compensation program. The terms and timing of possible payments must be determined by the current management of Binance.
In an initial comment to BeInCrypto, an exchange representative said that the company was aware of reports of a potential security issue and was conducting an investigation.
At that time, Binance had not confirmed any negative impact of the incident on client funds.
The cryptocurrency market reacted with a decline
Reports of a possible hack of the largest cryptocurrency exchange were accompanied by a decrease in the value of major digital assets.
According to Crypto News Flash, on the evening of October 29, Bitcoin was trading around $78,900, losing about 2.6% over the day. Ethereum fell by more than 4%, and the native token of the Binance ecosystem, BNB, by almost 7%.
According to data from CoinGlass, amid heightened volatility, traders' positions worth more than $620 million were forcibly liquidated within one hour.
At the same time, it cannot be definitively stated that all of the cryptocurrency market decline was caused solely by reports of a possible hack of Binance.
The largest cryptocurrency exchange has a special reserve fund, SAFU, designed to protect user assets in emergency situations. However, the possible mechanism for its use in connection with the events of October 29 has not yet been disclosed.
The key circumstances of the incident remain under investigation: how the transfers were initiated, whether outsiders gained access to private keys, who owns the new wallets, and what amount of funds will ultimately be lost.
