Assets worth roughly $2.5 billion to $2.8 billion flowed out of a Binance hot wallet on Thursday evening, with the available evidence pointing to a hack. Tether and Circle have frozen nearly $1.8 billion in stablecoins in connection with the incident, but Binance had not officially confirmed the hack at the time of writing.
According to Etherscan data, the “Binance 14” hot wallet sent approximately 167,500 ETH, around 1.6 billion USDT and more than 60 other tokens to a newly created address in a single transaction.
Fifteen minutes later, another 780 million USDC arrived at the same address from “Hot Wallet 34”. On-chain data showed that the address that initiated the transaction had been funded through the Tornado Cash mixer, which is unusual, to say the least, for routine internal wallet maintenance.
What has CZ said about the Binance hack?
Binance founder Changpeng Zhao wrote on X that it did appear to be a hack and thanked Tether for quickly freezing around 971 million USDT and Circle for freezing approximately 823 million USDC. He stressed that he no longer runs Binance.com, but said that, as a shareholder, he expected user funds to be fully covered.
Loss estimates have mainly been circulating on social media and combine transfers across several blockchains. Binance has had its SAFU fund in place since 2018 for incidents like this, and when it lost 7,000 BTC in 2019, it covered users’ losses itself. The fact that a large share of the stolen stablecoins has been frozen also significantly reduces the amount the attacker could make off with.
How did Bitcoin’s price react to the Binance hack?
The market reacted immediately. Bitcoin fell below $78,500 and Ethereum dropped below $2,250. Solana and XRP also declined, while exchanges saw a wave of long-position liquidations. In my view, the reaction so far has mainly been driven by fear.
If Binance confirms that customer funds are safe and covers the loss, this sell-off could prove short-lived. The risk would increase, however, if the impact turned out to be greater than currently estimated or if customers began withdrawing their funds en masse.
