The world's biggest cryptocurrency exchange was thrown into chaos on Thursday as a suspected hack triggered a frantic $3.6 billion asset freeze and sent already-jittery investors running for the exits.
Binance — the behemoth that has come to define the $2 trillion digital-asset industry — immediately suspended all deposits and withdrawals while cybersecurity experts warned the haul could be among the largest thefts in crypto history, with some estimates putting the loss as high as $7.8 billion.
The exchange has not confirmed any theft of customer funds, and its brass insisted through the panic that "user funds are completely safe."
"Rest assured that user funds are completely safe. We are working non-stop to resolve this issue. Binance will cover all losses."
— Binance spokesperson
'A hit to confidence in the industry as a whole'
Within hours of the alarm being raised, an extraordinary scramble was underway across the crypto world as rival firms rushed to lock down potentially compromised funds before they could vanish into the blockchain ether.
Tether chief executive Paolo Ardoino said his company had already frozen more than $2.2 billion worth of its USDT stablecoin tied to the suspected Binance breach.
"Protecting the industry and our partners is our main priority."
— Paolo Ardoino, Tether CEO
Circle chief executive Jeremy Allaire announced a separate freeze worth more than $1.1 billion, saying his firm was working hand-in-glove with law enforcement.
"In coordination with law enforcement, we have frozen more than 800M USDC associated with the incident and will continue supporting the investigation."
— Jeremy Allaire, Circle CEO
Blockchain tracker Arkham went further still, identifying wallets holding more than $8 billion in assets linked to the suspected incident.
Teng tries to steady the ship
Binance chief executive Richard Teng moved fast to steady nerves, posting a blunt message to customers as the market swooned.
"I want to be direct: user funds remain SAFE."
— Richard Teng, Binance CEO
The exchange said it was urgently investigating and working with law enforcement, cryptocurrency issuers and industry partners to trace and freeze further assets, promising a full account of the incident once the dust settled.
But for a market painfully familiar with exchanges becoming the story for all the wrong reasons, the damage was already being tallied.
"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."
— Fredrick Collins, Velo Data CEO
No involvement of artificial intelligence in the suspected breach has been established.
Not crypto's first rodeo
The panic will stir grim memories for anyone who lived through the spectacular implosion of FTX in 2022, when billions in customer funds vanished overnight and its founder, Sam Bankman-Fried, was hauled off to prison.
Binance, which swallowed much of the market share FTX left behind, has long billed itself as the safer bet — bigger, better capitalised and, its executives have argued, too big to fail.
On Thursday, that promise was put to its sharpest test yet.
As the freeze orders piled up and rival executives traded reassurances, the only certainty was the one investors dread most: in crypto, the next headline is always one hack away.
