Binance investigates potential hack as Tether freezes over 1.567B USDT

Binance is in the news today after it announced that it was investigating reports of a “potential security issue.” The announcement followed alerts about large wallet transfers and a statement from Tether CEO Paolo Ardoino that the company had frozen more than 1.567 billion USDT. In fact, the exchange assured customers that their funds were “completely safe.”  Binance issues a customer warning In its statement on X, Binance said its security teams were urgently reviewing the available information. It promised further updates through official channels once details had been verified. Binance’s statement didn’t give a loss estimate or explanation of how the suspected incident occurred. Tether reports a large freeze According to Ardoino, Tether froze more than 1.567 billion USDT related to a potential Binance exchange hack. USDT is Tether’s dollar-linked stablecoin. Freezing tokens means they cannot be moved from the offending addresses. Ardoino’s number refers to the amount handled by Tether; but at press time, the losses were still being tallied up. For his part, Binance founder Changpeng Zhao [CZ] commended Tether for stepping in promptly. He also said that about $823 million was also frozen by Circle [USDC issuer]. CZ also that the activity looked like a hack, claiming that he expects that customer assets would be completely covered. User funds are safe! It does look like a hack on Binance. Appreciate the quick freeze from Tether (~$971m) and Circle (~$823m). I don’t manage Binance (.com) anymore, but as a shareholder, I expect all user funds will be fully covered. Blockaid examines transfers across several networks Blockaid, a security firm, picked up on large outgoings in other wallets to and from Binance-owned wallets, which began at about 20:24 UTC on 29th October. It first looked at Ethereum, Arbitrum, and Avalanche, with related receipts on Optimism. Blockaid claimed these were all consistent with being fraudulent, but admitted it could also be an internal money transfer. The firm’s preliminary estimates included about $2.5 billion from two Ethereum wallets, plus 780 million USDC from another account. Those amounts were still being reconciled, and at the time of this writing, the estimate was over $5 billion.  In a follow-up, Blockaid said one examined account had been configured to let a designated operator drain its assets. Observers will be waiting for Binance’s follow-up communication to verify their affected systems, the scope of the attack, and the impact on their customers. Final Summary Binance is investigating a potential security issue, with the exchange claiming that customer funds are safe. Ardoino announced Tether froze over 1.567 billion USDT as the cause and final losses remain unresolved.