Binance is investigating a significant incident involving the alleged theft of approximately $2.8 billion in cryptocurrency from its Ethereum wallets. This situation arose from a series of large transfers conducted from one of the exchange's most active wallets, referred to as Binance 14, to a newly created address on a Thursday evening. While Binance has initiated an investigation into these transactions, it has not confirmed any loss of customer funds.
Changpeng Zhao, the founder of Binance, acknowledged that the incident may involve a hacking breach, but reassured users that their funds are secure. Zhao stated that all funds are expected to be recoverable and emphasized that Binance is probing a potential security issue.
Initial reports indicate that the stolen assets include around $1.6 billion worth of Tether (USDT), $780 million in USD Coin (USDC), and $440 million in Ether (ETH), in addition to smaller cryptocurrency amounts. In response, stablecoin issuers Tether and Circle have taken steps to freeze some of the affected assets to help contain the situation. However, Ether cannot be frozen like stablecoins, leaving the reported $440 million in ETH outside of their direct control. Although this asset freeze could hinder the attacker’s ability to move some of the funds, it does not guarantee recovery.
Details about how the attack unfolded suggest that the perpetrator might have employed a technique known as EIP-7702. This feature allows a cryptocurrency wallet to delegate certain operations through smart contracts. As a result, the attacker seemingly acquired the necessary permissions to withdraw assets from the compromised wallet. However, the exact method through which these permissions were obtained is yet to be determined, and it remains uncertain whether the attacker used a stolen private key, compromised a transaction-signing system, or gained access via an insider.
Experts in security speculate that the incident primarily revolves around stolen wallet credentials or signing infrastructure, rather than an inherent vulnerability in the Ethereum platform itself.
The news of the theft has shaken the crypto market. Bitcoin's price fell to the $79,000 threshold, while Ether dipped below $2,240. Binance’s token, BNB, also saw a decrease of approximately 6.1%. If it's confirmed that the stolen amount truly totals $2.8 billion, this would surpass other notable exchange hacks, including the $1.46 billion hack of Bybit in 2025. The definitive loss figure remains undetermined as some of the withdrawn assets may still be recoverable.
At this stage, Binance has not clarified if customer funds have been affected or whether it will utilize its Secure Asset Fund for Users (SAFU) to address potential losses. This fund currently holds about 15,000 bitcoins, valued around $1.19 billion at the time of reporting. While this could offer some security, it falls short of covering the projected $2.8 billion loss.
As the investigation unfolds, recovering any frozen assets will be crucial for assessing the full implications of this incident. The subsequent actions will depend on the outcomes of the investigation, the potential recovery of frozen cryptocurrencies, and the confirmation of any customer losses by Binance.
