Binance disclosed Friday that a security breach impacted approximately $6.3 billion in client assets, with roughly $3 billion frozen on-chain. The company said this marks the largest crypto hack on record. Binance stated it will cover losses using its Secure Asset Fund for Users and has begun recovering assets.
The attack's mechanics remain unclear. Binance initially suggested a compromised DevOps engineer's laptop may have enabled unauthorized withdrawal transactions, but Co-CEO Richard Teng later stated the breach involved a more complex process than misuse of a single engineer's permissions.
TRM Labs and Chainalysis both attributed the hack to North Korean hackers. TRM Labs cited similarities to previous North Korea-linked thefts including small Tornado Cash withdrawals and pre-staged signatures. Chainalysis identified the group as TraderTraitor, which it said has repeatedly targeted crypto exchanges and DeFi protocols.
The FBI said Friday it was aware of the incident and in contact with relevant partners to understand its scope and coordinate investigative steps.
Circle Internet Group, Tether, and Ripple froze funds tied to the hack. Circle froze over $800 million in USD Coin. Tether froze more than $1.5 billion in USDT stablecoin. Ripple's Jack McDonald said it was actively freezing affected RLUSD holdings.
Binance temporarily suspended withdrawals while upgrading security systems and revoking affected address authorizations. Co-founder Yi He said deposits remained unaffected and normal. The exchange expects to resume withdrawal services within 48 hours.
Bitcoin fell more than 4% to $77,187.60 on Friday. CFTC Chairman Michael Selig told CNBC that the breach supports the agency's October 5 proposal to place crypto exchanges under federal oversight through CFTC registration and cyber security safeguards.
Investors monitoring Bitcoin (BTC), stablecoins (USDC, USDT, RLUSD), and Binance's operations should watch for updates on fund recovery progress and any regulatory enforcement actions stemming from the breach investigation.