Binance halts all deposits and withdrawals, pledges to cover all losses

"Binance will cover all losses," the world's largest crypto exchange said on its official X account at 9:13 a.m. KST on Oct. 30, as it temporarily suspended all deposits and withdrawals as a precaution. It was the exchange's first pledge of compensation, coming about four hours after on-chain data showed more than $5 billion in crypto leaving Binance hot wallets (internet-connected wallets used for withdrawals) early that morning. Decrypt, citing on-chain data, reported that at least $5.57 billion left across Ethereum, Bitcoin and Tron. In South Korea, Upbit was the first exchange to warn users about sending crypto to Binance.

A compensation pledge, then the doors close

Binance first paused withdrawals at 7:15 a.m. KST, saying its team was "conducting security checks." At 9:13 a.m. it extended the halt to deposits, saying "all deposits and withdrawals are temporarily suspended while our team conducts security checks, freezes funds, and works with law enforcement." The exchange said it "will share a full post-mortem once the investigation is complete" and that "user funds are safe." It did not give a timeline for resuming service.

Binance CEO Richard Teng wrote on X at 9:22 a.m. that the company was "aware of reports regarding a potential security issue" and was "actively investigating," adding that "user funds remain SAFE." Binance has not yet confirmed a hack or the size of any loss. When Binance lost 7,000 bitcoin in May 2019, it covered the loss with its Secure Asset Fund for Users (SAFU).

Frozen funds climb from $2.54 billion to $3 billion in 90 minutes

The first official figure Binance released was the frozen amount. At 8:22 a.m. KST, it said it was "aware of differing figures circulating publicly regarding the amount frozen, including references to $1.8 billion," and that "the current verified total frozen is $2.54 billion." About 90 minutes later, at 9:52 a.m., it said "the current verified total frozen amount is around $3 billion."

Most of the frozen funds came from stablecoin issuers. Tether CEO Paolo Ardoino said the company froze more than 1.567 billion USDT, and Circle CEO Jeremy Allaire said Circle froze more than 800 million USDC. Binance co-founder Yi He said the Arbitrum Security Council executed a transaction to freeze about $30.5 million tied to the incident. Coins without an issuer, such as ether and bitcoin, cannot be frozen this way.

Upbit warns first at 7:46 a.m., Bithumb and Coinone follow

At 7:46 a.m., Upbit posted a notice titled "Caution on digital asset withdrawals to Binance." Upbit said "a security incident and signs that some digital assets were stolen have been confirmed at Binance," and that it "may restrict digital asset withdrawals to Binance if necessary to protect investors." It added that it would respond under the relevant laws and procedures if it received requests to freeze assets or otherwise cooperate. According to Yonhap News, Bithumb, Coinone and DigitalX followed with their own notices urging caution on withdrawals to Binance.

Bitcoin in the $76,000s, kimchi premium at 1.3%

Prices fell further through the morning. On Binance, bitcoin dropped more than 5% from $80,848 at 5 a.m. KST on Oct. 30 to $76,658 in the 10 a.m. hour, and traded around $76,900 at about 10:30 a.m. BNB slid from about $744 at 5 a.m. to as low as $680 before trading around $694.

As of 10:30 a.m. KST on Oct. 30, bitcoin traded at 104.22 million won and ether at 2.968 million won on Upbit. Bitcoin traded at about a 1.3% premium on Upbit over Binance, a gap known as the kimchi premium (the gap between prices on Korean exchanges and global markets). BNB is not listed on Upbit's Korean won market and traded at 938,500 won on Bithumb.