Binance hot wallets drain $5.5 billion, Tether and Circle freeze $1.8 billion

On October 29, blockchain monitors recorded more than $5.5 billion exiting wallets tied to Binance across three major networks. The outflows, detected on Ethereum, Bitcoin and Tron, triggered an emergency response from stablecoin issuers Tether and Circle, which together froze roughly $1.8 billion of USDT and USDC in the primary receiving address. Binance acknowledged the “potential security issue” and said its security team is reviewing the data, but the exchange has not confirmed that user funds were compromised.

Scale of the outflows

According to Decrypt, the on‑chain tally breaks down to about $3.51 billion on Ethereum, $1.44 billion in Bitcoin (across 18,270 transactions), and $630 million on Tron. The first Ethereum transaction, logged at 20:24 UTC, moved 167,464 ETH plus 63 token transfers, including 1.615 billion USDT, to a newly created address. The rapid movement of assets across multiple chains makes this the largest suspected hack in crypto history, surpassing the $1.5 billion Bybit theft in February 2025 and the $333 million Bitcoin theft that boosted Monero in April 2025.

How the attacker may have acted

The investigation points to a delegation transaction on Ethereum that used EIP‑7702, a feature allowing a regular wallet to execute delegated smart‑contract code. Odysseas Lamtzidi of Phylax Systems explained that the delegation persists, enabling later transfers without additional signatures. The exact method used to obtain the required signature remains unknown, but the involvement of a Tornado Cash‑funded address suggests the attacker attempted to obscure the transaction trail before delegating control over a Binance hot wallet.

Responses from stablecoin issuers and Binance

Tether immediately froze 975.1 million USDT in the main receiving address, while Circle locked 823 million USDC, bringing the total frozen amount to about $1.8 billion. Both issuers can block specific addresses, a capability they exercised as the attacker continued moving funds. Circle’s CEO Jeremy Allaire posted on X that the company is working with law enforcement and will keep supporting the investigation. Binance, the world’s largest crypto exchange, posted on X that its security teams are reviewing all relevant information with urgency and will provide updates through official channels once verification is complete.

What to watch next

Analysts will monitor whether additional funds are frozen or recovered as law‑enforcement agencies trace the destination wallets. Price movements of major assets—Bitcoin, BNB and privacy‑focused coins like Monero—are likely to reflect market sentiment as the investigation unfolds. Finally, any regulatory commentary or legal actions stemming from the breach could shape future security standards for hot‑wallet management across the industry.

Sources

• The Block: Binance investigating hack as suspicious outflows reach up to $5.8 billion
• Decrypt: Binance Drained of $5.5 Billion in Suspected Hack, Tether and Circle Freeze $1.8 Billion
• Crypto Briefing: Tether freezes over $1.567 billion in USDT tied to suspected Binance hack
• The Defiant: Tether Freezes 971 Million USDT in Wallet Linked to Suspected Binance Drain

This article was prepared by the COINMAG newsroom from the reports listed above.