Binance Breach Rocks Crypto Market as Suspected Outflows Reach $5.7 Billion

Binance Sees $5.7 Billion in Coin Outflows

Bitcoin Drops 4%, Ether Slides 4.5%

$2.54 Billion Frozen as DeFi Also Feels the Shock

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

CoinDesk reported on October 30 that Arkham, the blockchain analytics firm, tracked about $5.7 billion in assets in a wallet believed to be tied to the attacker. HyperDash had earlier estimated the outflows at about $5.6 billion. The final loss is still being calculated, but based on outside estimates alone, the breach ranks among the largest hacks on record.

The incident 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 handle user deposits and withdrawals. A large volume of coins first left the Ethereum network. Fund movements were then detected on Bitcoin and Tron, quickly driving up estimates of the outflows.

Bitcoin Breaks Below $78,000 as Liquidations Mount

The hack added another blow to a crypto market that was already weakening. As of 8:48 a.m. in Korea on October 30, Bitcoin traded at $78,058.23 on Binance’s USDT spot market, down 4% from a day earlier. It briefly fell below the $78,000 level. Ether dropped 4.50% over the same period to $2,252.40.

Losses were steeper among altcoins. Solana traded at $95.79, down 6.41% from 24 hours earlier. XRP fell 6.68% to $1.2368. Ether at one point slipped to $2,233, while Solana fell to $95. Selling spread from the largest tokens to major altcoins, weakening sentiment across the market.

The drop triggered forced liquidations among leveraged traders. Data from CoinGlass showed that about $627.7 million in derivatives positions were liquidated in the hour when concerns over the hack spread. Long positions accounted for about $606.6 million of that total. Falling prices and forced selling combined to deepen the shock.

$2.54 Billion Frozen as Shock Spreads to DeFi

Binance said in an official statement that “the total verified amount frozen currently stands at $2.54 billion.” The company said the figure could rise further because it is tracking additional assets with law-enforcement agencies, stablecoin issuers and blockchain analytics firms.

Service restrictions also widened. Binance initially described some withdrawal disruptions as a technical error. It later said it was conducting a security review and would resume withdrawals once the security 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 to avoid asset freezes. Stablecoins that issuers could freeze were swapped into Ether 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 spilling into DeFi. Stolen assets used as lending collateral could expose financial protocols outside centralized exchanges to risk. Aave blocked new deposits and borrowing in its Ethereum mainnet V3 market, while Kamino temporarily suspended borrowing in its SOL and BTC markets as a precaution.

The adequacy of Binance’s user protection fund, SAFU, is also being tested. Binance disclosed in February that the fund held 15,000 Bitcoin. Assuming that amount is unchanged and applying a price of $79,000 per coin, the fund would be worth about $1.185 billion, leaving a wide gap with outside estimates of the outflows. Depending on the final loss and the outcome of asset recovery, additional resources beyond the fund may be needed.

Binance has repeatedly said user funds are safe. Founder Changpeng Zhao also said Binance appears to have been hacked and added that he expects users to be made whole in full as a shareholder. Market attention is now focused on whether further outflows can be blocked, how much of the frozen assets can be recovered, and what specific compensation plan will be offered. To restore trust in the world’s largest exchange, Binance will need to back up its assurances with asset recovery and service restoration.