Stablecoin Issuers Freeze $2.6B After Suspected Binance Breach

Stablecoin issuers have frozen more than $2.6 billion linked to a suspected Binance security breach, while researchers estimate nearly $6 billion in assets left Binance-linked wallets. Binance says it is investigating and has assured customers their assets are safe, but has not confirmed the amount potentially compromised.

Tether reported freezing more than $1.567 billion in USDT, and Circle froze approximately $823 million in USDC while coordinating with law enforcement. Ripple reportedly restricted about $200 million, while Trump-linked World Liberty Financial restricted $27 million in USD1. Paxos also said it froze 1,906.67 PAX Gold tokens valued at more than $8 million. Together, the reported freezes exceed $2.6 billion.

Why it matters

Kairos Research estimated that about $5.7 billion left Binance hot wallets. The firm said suspicious activity began when an external address used Ethereum's EIP-7702 account-delegation mechanism to attach executable code to a Binance hot wallet. A transaction three minutes later moved 63 tokens, including 1.6 billion USDT and 167,000 ETH. Other transfers included 28,000 ETH, 18,270 BTC and 613 million USDT on Tron.

The incident also reached DeFi lending. Before Tether intervened, the suspected attacker deposited $60 million in USDT into Aave and borrowed about 19,800 ETH, valued at $45 million. Aave paused most Ethereum lending markets, freezing new deposits and borrowing while allowing users to withdraw and repay. The protocol said its contracts were unaffected and positions remained overcollateralized.

Market impact

Freezes can limit the movement of assets held by participating issuers, but they have not stopped all activity: about $850 million in ETH reportedly continued moving between newly created wallets. Kairos said 17,270 BTC remained untouched. The gap between the reported outflows and confirmed losses remains unresolved as Binance investigates, leaving asset recovery and the full scale of the suspected breach uncertain.