Binance is currently investigating a suspected theft involving nearly $2.8 billion in cryptocurrency that was moved from its Ethereum wallets through a sequence of transactions. The world’s largest cryptocurrency exchange, Binance, has initiated an inquiry into the situation.
Blockchain records indicate that one of Binance's most active wallets, known as Binance 14, transferred substantial amounts of cryptocurrency to a newly established address on Thursday evening. While Binance has yet to confirm whether any customer funds have been lost, the situation is under scrutiny.
Changpeng Zhao, the founder of Binance, mentioned that the incident could potentially be a result of hacking, although he assured users that their funds are secure. Zhao indicated that all funds should be accounted for as the investigation into a possible security breach continues.
The alleged stolen assets include around $1.6 billion in Tether (USDT), $780 million in USD Coin (USDC), and $440 million in Ether (ETH), along with several other smaller holdings. In response, stablecoin issuers Tether and Circle have taken steps to freeze some of the affected assets. Unlike stablecoins, Ether cannot be frozen by any central authority, which leaves the reported $440 million in ETH out of reach of immediate control. The freezes might help halt the movement of some of the stolen funds, although it does not guarantee their recovery or return to the rightful owners.
As for the method of the attack, blockchain data suggests that the assailant utilized a technique called EIP-7702, which allows a cryptocurrency wallet to delegate certain tasks to a smart contract. This enabled the attacker to gain the necessary permissions for withdrawing assets from the affected wallet. However, the specific means through which these permissions were obtained has yet to be clarified.
Speculation regarding the breach includes the possible use of a stolen private key, a compromised transaction-signing mechanism, or insider access. The exact nature of the incident remains unverified, but security analysts believe that it primarily involves compromised wallet credentials rather than an inherent flaw within the Ethereum platform.
The incident has spurred a negative reaction across cryptocurrency exchanges. Bitcoin prices have dipped to around $79,000, while Ether has fallen below $2,240. Binance's own token, the BNB, has experienced a decline of approximately 6.1%.
Should the full extent of the funds be confirmed as stolen, this incident would eclipse previous major hacks, including the Bybit hack in 2025, which resulted in a loss of $1.46 billion. However, the actual loss may still be undetermined since some withdrawn assets might be recoverable.
At this time, Binance has not confirmed whether customer funds were impacted or if it plans to utilize its Secure Asset Fund for Users (SAFU) to mitigate any losses. The fund currently holds about 15,000 bitcoins, valued at approximately $1.19 billion based on the report's exchange rates. While this may offer some level of protection, it wouldn’t cover the entire estimated loss of $2.8 billion.
The recovery of frozen assets will play a crucial role in assessing the overall impact of this incident. The next steps hinge on Binance's investigation, the potential recovery of frozen cryptocurrencies, and the clarification of customer losses by the exchange.
