Binance is currently investigating the suspected theft of approximately $2.8 billion in cryptocurrency after significant amounts were transferred out of its Ethereum wallets. The largest cryptocurrency exchange began its inquiry following a series of transactions involving one of its most active wallets, labeled Binance 14, which moved a large sum of digital assets to a new address on Thursday evening. While Binance has not confirmed any loss of customer funds, the situation is being closely monitored.
Changpeng Zhao, the founder of Binance, suggested that this incident might involve a hacking attempt but reassured users that their funds are secure and all losses are expected to be covered. The company is looking into a possible security breach.
The alleged stolen cryptocurrency includes around $1.6 billion in Tether (USDT), $780 million in USD Coin (USDC), and $440 million in Ether (ETH), along with smaller amounts of various digital assets. Following the theft, stablecoin providers Tether and Circle took steps to freeze some of the affected assets. However, since Ether is not a stablecoin, it cannot be frozen by any central authority, leaving the $440 million in ETH unprotected.
Blockchain analysis indicates that the attack utilized a method known as EIP-7702, which allows a cryptocurrency wallet to delegate certain functions to a smart contract. This technique enabled the attacker to obtain necessary permissions for withdrawing funds from the compromised Binance wallet, though the exact method of acquiring these permissions remains uncertain. There are speculations that the attacker may have employed a stolen private key, exploited a compromised transaction-signing system, or even gained insider access. However, these theories have yet to be validated.
Security analysts suggest that the incident appears to stem from compromised wallet credentials or signing infrastructure rather than a flaw in the Ethereum platform itself.
In the wake of this news, the crypto market experienced turmoil, with Bitcoin plummeting to around $79,000 and Ether falling below $2,240. Binance’s own token, BNB, dropped by about 6.1%.
Should the entire sum be confirmed as stolen, this theft would exceed previous significant breaches, including the $1.46 billion hack of Bybit in 2025. Still, the overall loss is not yet definite, as some withdrawn assets may potentially be recovered.
As for Binance's response, the exchange has not specified whether customer funds were impacted or if it plans to utilize its Secure Asset Fund for Users (SAFU) to cover potential losses. The SAFU contains around 15,000 bitcoins, valued at approximately $1.19 billion at the reported rates. Although this fund could provide additional protection, it would fall short of compensating for the estimated $2.8 billion loss.
The recovery of any frozen assets will be vital for assessing the full implications of this incident. The forthcoming steps will undoubtedly rely on the outcomes of Binance's investigation, the retrieval of frozen funds, and the verification of any losses experienced by customers.
