By Mrinmay Dey and Vallari Srivastava
Oct 29 (Reuters) - Binance, the world's largest cryptocurrency exchange, said on Thursday that $2.54 billion in crypto assets had been frozen as it investigated a potential security breach, with stablecoin issuers Circle and Tether freezing related assets.
"Binance will cover all hacking losses," Binance co-founder Yi He said.
Binance said the amount frozen could increase as it worked with law enforcement agencies, token issuers, blockchain intelligence firms and
other industry partners to trace and freeze additional assets.
Binance co-founder Changpeng Zhao, who no longer runs the company, said in a post on X that the incident "looked like a hack."
Tether said it had frozen nearly $1.57 billion in assets linked to the incident, while Circle froze more than $800 million.
Binance said it was conducting security checks and would resume withdrawals once the issue was fully resolved. It added user funds remained safe and that teams were reviewing the incident.
The exchange also temporarily suspended trading on its Binance Alpha platform as a precaution.
World Liberty Financial, a crypto company linked to US President Donald Trump and his family, said it had worked with cryptocurrency custodian BitGo to freeze funds stolen in what it described as a Binance hack. Binance's Yi He said $27 million in stablecoins and about $2 million worth of World Liberty tokens had been frozen.
Crypto firm Ripple also froze roughly $200 million in funds, Yi said. Jack McDonald, senior vice president of stablecoins at Ripple, said the company was closely monitoring reports of a potential exploit involving Binance and was freezing affected funds and coordinating with relevant parties.
Miguel Morel, CEO of blockchain intelligence firm Arkham, said data indicated that billions of dollars appeared to have been hacked from Binance by an unknown actor, though the exact cause had not been confirmed. Morel said the incident began around 4:30 p.m. EST and appeared to be ongoing.
The incident adds to a string of crypto thefts. Last year, attackers stole $2.9 billion worth of cryptocurrency across nearly 150 attacks, according to researchers at TRM Labs. In September, cryptocurrency exchange Bitget said roughly $350 million in crypto had been stolen from its platform, underscoring the industry's vulnerability to hackers.
Authorities have warned that organised crime groups are increasingly using cryptocurrencies to move funds across borders outside the traditional financial system.
Binance, which allows users to buy, sell and trade digital assets, has more than 300 million registered users globally and about $160 billion in assets under custody, according to the exchange's 2024 annual report.
Binance.US, a separate cryptocurrency exchange, said it was not affected by the security incident.
Coinbase said it was unaffected and was monitoring the situation.
In an unrelated incident earlier on Thursday, prediction market operator Polymarket temporarily halted trading after a security incident involving a third-party provider. It later resumed trading and said it would fully reimburse affected traders.
(Reporting by Vallari Srivastava and Anusha Shah in Bengaluru and Mrinmay Dey in Mexico City; Editing by Maju Samuel, Michelle Price and Sherry Jacob-Phillips)
