Crypto firms freeze over $2.5 billion after Binance flags security issue

Cryptocurrency markets tightened Thursday as exchanges and token issuers moved to contain losses after the world's largest trading venue reported a security breach.

Binance said it is investigating reports of a potential security issue and had frozen more than $2.54 billion in funds by Thursday evening. Deposits and withdrawals were suspended while the company conducts security checks, freezes assets and cooperates with law enforcement. "Rest assured that user funds are completely safe," a Binance spokesperson said in a statement.

Changpeng Zhao, who founded Binance in 2017 and stepped down as chief executive after pleading guilty in 2023 to a felony related to money laundering controls, wrote on X that the incident "does look like a hack on Binance." He added, "User funds are safe!" and said that as a shareholder he expects all user funds will be fully covered. Zhao left prison last year after being sentenced for violating the Bank Secrecy Act and was pardoned by President Donald Trump in 2025.

Stablecoin issuers moved alongside Binance to freeze assets. Circle co-founder and CEO Jeremy Allaire wrote on X that the company froze more than $800 million in currency tied to the incident "in coordination with law enforcement." Tether CEO Paolo Ardoino said his firm froze over $1.5 billion related to "a potential Binance exchange hack." Binance said it is working with law enforcement, issuers, blockchain intelligence firms and industry partners to trace and freeze additional assets, and that the total may rise.

Bitcoin fell 3.2% Thursday evening to under $79,000. Binance said its security teams are reviewing information and will post updates through official channels once details are verified.