A major security incident involving Binance has raised fresh concerns about cryptocurrency exchange security after blockchain security firm Blockaid reported that billions of dollars in digital assets moved out of wallets associated with the exchange.
According to Blockaid co-founder and CEO Ido Ben-Natan, at least $3.5 billion was transferred from Binance hot wallets across multiple blockchain networks in less than an hour, potentially making the incident one of the largest cryptocurrency thefts ever reported.
The incident appears to validate warnings from Blockaid’s first-half security report, which predicted that the cryptocurrency industry would experience its first seven-figure exploit during the second half of the year.
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The reported scale of the Binance incident has surpassed that initial warning, with billions of dollars potentially affected. Blockaid’s preliminary analysis identified approximately $2.5 billion leaving the Binance 14 and Binance 16 wallets on Ethereum.
Another $780 million in USDC reportedly moved from a Binance smart account. These initial transfers prompted further investigations into the destination of the funds and the methods allegedly used to gain unauthorized access.
One particularly concerning discovery involved a wallet that appeared to have been compromised. Blockaid said the wallet had been modified in a way that allowed a particular user or group to withdraw nearly all its funds without requiring permission from the original owner.
The configuration created an ongoing vulnerability because additional deposits could potentially be withdrawn by the unauthorized operator. This meant the risk could extend beyond the funds already present in the wallet, potentially exposing newly deposited assets to further theft.
Ben-Natan described the incident as the biggest cryptocurrency hack in history, citing preliminary evidence of at least $3.5 billion in outflows from Binance hot wallets on Ethereum, Arbitrum, Optimism and Avalanche within less than an hour.
He added that on-chain trackers were reporting additional outflows involving Bitcoin and Tron, suggesting the full scale of the incident could be larger than initially established. The investigation also uncovered indications that the attack may have been prepared in advance.
According to Ben-Natan, the attacker funded the operation through Tornado Cash and rehearsed a similar wallet takeover using test wallets hours before the incident. These activities were reportedly visible on the blockchain, potentially providing investigators with evidence of the preparation behind the operation.
Another significant development involved stablecoin issuers Tether and Circle. Ben-Natan said the companies acted quickly to freeze approximately $2.4 billion, potentially preventing a substantial portion of the reported funds from being moved or converted.
However, the exact amount recovered or secured remains subject to confirmation as investigators continue tracing the transactions. Despite these developments, important questions remain unanswered.
Blockaid is still examining how the wallet was compromised, where the remaining funds moved, and whether the incident forms part of a broader coordinated attack. The precise relationship between the affected wallets and Binance’s wider infrastructure requires clarification.
The incident highlights the importance of wallet security, transaction monitoring and rapid coordination among cryptocurrency companies. Even sophisticated platforms can face serious risks when wallet permissions or access controls are compromised.
As Blockaid continues its investigation, the findings could have significant implications for cryptocurrency security practices. Until the full facts are established, the reported figures and attack details should be treated as preliminary findings rather than independently confirmed conclusions.