Binance, the world's largest cryptocurrency exchange, said it had frozen US$3 billion in crypto assets following a potential security breach, with stablecoin issuers Circle and Tether also freezing related assets. Binance co-founder Yi He stated that the exchange would cover all hacking losses, though no additional details were provided. Market reactions were immediate, with Bitcoin and ether experiencing drops of around 2 percent and 2.5 percent respectively, hitting six-week and two-month lows. Binance's 24-hour losses were more pronounced, with BNB down by over 8 percent. The incident, which could be the largest crypto theft ever, according to Chainalysis, also saw Crypto exchange Coinbase and the BNB buyer Strategy experience share price declines in extended US trading. Binance and its partners are working to trace and freeze additional assets, with the amount potentially increasing as further investigations proceed.
The value at risk highlights the growing difficulty in countering cybersecurity threats, as AI can identify vulnerabilities faster than solutions can be implemented. Users are likely to shift towards larger and more secure exchanges, as the risk of significant breaches becomes more apparent. Tether and Circle each froze assets amounting to nearly US$1.57 billion and over US$800 million, respectively. Binance also temporarily halted trading on its Binance Alpha platform as a precaution, and said user funds remained safe. Ripple froze roughly US$200 million in funds, while US President Donald Trump's crypto company, World Liberty Financial, froze US$27 million in stablecoins and about US$2 million worth of World Liberty tokens. The incident follows a series of crypto thefts, with Bitget losing approximately US$350 million last year, further illustrating the industry's vulnerability.