Binance Hit by Suspected $5.7 Billion Outflow, Roiling Crypto Market

Binance, $5.7 Billion in Estimated Coin Outflows

Bitcoin Down 4%, Ethereum Falls 4.5%

$2.54 Billion Frozen as DeFi Also Put on Alert

The cryptocurrency market is reeling after a major hack at Binance, the world’s largest digital-asset exchange. External estimates put the suspected outflow at about $5.7 billion. Bitcoin and Ethereum fell, while Solana and XRP each slid more than 6%. Binance moved to freeze assets and conduct emergency security checks, but the fallout spread into decentralized finance markets outside the exchange, chilling investor sentiment.

On Oct. 30, CoinDesk reported that wallets believed to be linked to the attacker held about $5.7 billion in assets, based on tracking by blockchain analytics firm Arkham. HyperDash had earlier estimated the outflow at about $5.6 billion. The final loss is still being calculated, but based on external estimates alone, the incident would rank among the largest hacks on record.

The crisis emerged after a large amount of assets moved from Binance’s hot wallet to a new address. A hot wallet is connected to the internet to process user deposits and withdrawals. Large-scale outflows first appeared on the Ethereum network. Transfers were later detected on Bitcoin and Tron, pushing estimated losses sharply higher.

Bitcoin Breaks Below $78,000 as Liquidations Mount

The hack added fresh pressure to a cryptocurrency market that was already weak. As of 8:48 a.m. on Oct. 30, Bitcoin was trading at $78,058.23 on Binance’s USDT spot market, down 4% from a day earlier. At one point, it slipped below $78,000. Ethereum fell 4.50% over the same period to $2,252.40.

Losses were steeper in altcoins. Solana traded at $95.79, down 6.41% from 24 hours earlier, while XRP fell 6.68% to $1.2368. Ethereum at one point slid to $2,233, and Solana dropped to $95. Selling spread from market leaders to major altcoins, weakening sentiment across the market.

The drop triggered forced liquidations among leveraged traders. Data from CoinGlass showed about $627.7 million in derivatives positions were liquidated in the hour when hacking concerns spread. Long positions accounted for about $606.6 million of that total. Forced selling compounded the price decline and amplified the market shock.

$2.54 Billion Frozen as Shock Spreads to DeFi

Binance said in an official statement that “the current verified total frozen amount is $2.54 billion.” The company said the amount could rise as it works with law enforcement agencies, stablecoin issuers and blockchain analytics firms to trace additional assets.

Service restrictions also widened. Binance initially described some withdrawal disruptions as a technical error, but later said it was conducting security checks and would resume withdrawals once the issue is fully resolved. It also temporarily suspended Binance Alpha trading, including token purchases using spot wallet funds and Alpha instant trades.

The attacker moved into decentralized finance, or DeFi, to avoid asset freezes. Stablecoins that issuers could freeze were swapped into Ethereum or posted as collateral to borrow other assets. Decrypt reported that one wallet tied to the attacker deposited about $60 million in USDT into Aave and borrowed about 19,762 Ether.

Odysseas Lampridis, founder of Phylax Systems, said the fallout from the Binance hack is spreading into DeFi. Stolen assets entering lending collateral pools could expose financial protocols outside centralized exchanges to risk. Aave blocked new deposits and borrowing in its Ethereum mainnet V3 market, while Kamino temporarily halted borrowing in its SOL and BTC markets as a precaution.

The adequacy of Binance’s SAFU user protection fund is also being tested. Binance disclosed in February that the fund held 15,000 Bitcoin. At an assumed price of $79,000 per token, that amounts to about $1.185 billion, a wide gap from external estimates of the outflow. Depending on the final loss and the outcome of asset recovery efforts, Binance may need to use resources beyond the fund.

Binance has repeatedly said user funds are safe. Founder Changpeng Zhao also said Binance appears to have been hacked and that, as a shareholder, he expects users to be made whole. The market is now focused on whether additional outflows can be blocked, frozen assets recovered and concrete compensation plans presented. The exchange will need to back up its assurances with actual asset recovery and service restoration if it is to rebuild trust.