Binance is investigating a potential security issue after approximately $2.8 billion in cryptocurrency left labeled wallets and moved across five blockchain networks on October 29, prompting Tether to freeze $1.57 billion and Circle to freeze $823 million tied to the suspected incident.
The transfers began at 20:24:47 UTC when 28,005 ETH (approximately $64.9 million) departed a Binance-labeled wallet, according to on-chain monitoring service Whale Alert. Within minutes, a receiving address forwarded 195,460 ETH (approximately $449 million) to a second address at 20:38:47 UTC. At 20:41:23 UTC, 780 million USDC left another Binance-labeled wallet.
Analyst Spreek flagged the activity and noted the contract call was funded by an address linked to Tornado Cash, a cryptocurrency mixing service. The full amount circulated across five chains remains unreconciled, though on-chain watchers documented the total near $2.8 billion.
Binance issued a statement saying it was “aware of reports of a potential security issue and are actively investigating.” The exchange added: “Our security teams are reviewing all relevant information with urgency, and we will provide updates through official Binance channels as soon as we have verified information.”
Changpeng Zhao, Binance’s former CEO, characterized the event differently. “It does look like a hack on Binance,” Zhao said, though Binance’s official statement stopped short of confirming a breach.
The incident occurred as Bitcoin was already under pressure. The Federal Reserve held rates steady on October 28 with a hawkish reading that weighed on risk assets. Bitcoin slid from $80,849 to $80,438 between 20:00 and 20:15 UTC on October 29, then closed a candle at $78,884.52 down 1.9% during the 20:30 to 20:45 UTC window. The intraday low reached $78,297.
Market liquidations spiked in the hours following the transfers. Traders faced $1 billion in liquidations over the previous 24 hours, with $532 million liquidated in the preceding hour alone. Bitcoin accounted for $289 million in liquidations and Ethereum $236 million, with more than 82% of each asset’s losses tied to long positions being wiped out.
0xngmi, a co-founder at DeFi analytics platform DefiLlama, assessed the scale of the incident relative to Binance’s holdings. The exchange holds approximately $144 billion in assets under custody, meaning the suspected transfer amount represents roughly 1% of that total. “Cover it from balance sheet easily,” 0xngmi said.
The receiving addresses and their subsequent movements across chains remain under active review. Binance has not yet published a full technical incident report or specified which blockchains the funds traversed.
