$3 Billion Frozen After Security Incident Sends Bitcoin to Six-Week Low
Key Facts
Cryptocurrency prices fell on Friday, October 30, after Binance said it was investigating a potential security issue. The company said the incident’s estimated total impact was about $6.3 billion and that about $3 billion had been frozen on-chain by Thursday evening. Reuters tracked bitcoin’s decline to $77,646, its lowest level in six weeks, while ether reached $2,238.76, its lowest level in two months. Binance had said that more than $2.5 billion in assets had been frozen, according to a Reuters report published on Friday. The company’s estimates of the impact and the value of frozen assets show some of the reported financial fallout, while the Associated Press report did not explicitly confirm that the funds had been stolen. The decline followed security measures the platform said it took during the investigation, including a temporary suspension of deposits and withdrawals.
Binance said the suspension of deposits and withdrawals was temporary and part of security checks, the freezing of funds, and cooperation with law enforcement. The company added that its preliminary investigation pointed to the possible involvement of a DevOps engineer’s laptop, but said it had found no evidence that the private key to any wallet had been exposed. In its statement, Binance reassured users, saying: "Rest assured, user funds are completely safe." Binance said users would be compensated for losses, though the Associated Press report did not explicitly confirm that funds had been stolen. This remains an initial account of the incident until the company publishes details of its investigation.
Losses spread to other coins. BNB fell more than 8% over 24 hours to $694, according to Reuters, while ether dropped to a two-month low of $2,238.76. In another reading of prices on Friday, an Investing.com report citing Reuters said bitcoin was down 3.5% at $78,505.9 at 19:41 Eastern Time and was on track for a 6.1% loss in October. The same report said ether fell 4.4% to $2,256.26 and BNB declined 7.8% to $700.11. These prices differ from the lows Reuters cited in its other report, as the reports capture different points in a volatile trading session. EL7’s daily closes were $77,991.89 for bitcoin on October 29 and $78,285.3 on October 30, while ether closed at $2,253.13 and then $2,230.28, respectively.
The price declines coincided with widespread liquidations in the futures market. Total liquidations reached $1.5 billion at the time CoinDesk’s report was prepared, with long positions accounting for most of the losses. Bitcoin futures saw $468 million in liquidations, compared with $358 million for ether futures. Bitcoin also fell 3.2% below $79,000 on Thursday evening, according to the Associated Press. Market pressure came as cryptocurrencies were affected by high U.S. inflation data and a broader weakening in risk appetite linked to the technology sector, according to an Investing.com report citing Reuters. On the same day, Polymarket faced a separate security incident and halted international trading for about an hour before resuming it on Thursday afternoon, pledging to fully compensate affected traders.
Standard Chartered said, according to CoinDesk, that the back-to-back incidents at Binance and Polymarket could keep prices under pressure for some time, until details of the incident become clear and the frozen assets are released. The statements gave no timeline, while Binance said it would publish a detailed technical report after completing its investigation and verifying the facts. The company added that it would update its proof of reserves after completing its incident response. Binance’s announced next steps are therefore tied to completing the investigation and response, while traders await clarity on the value of the frozen assets and the details of the security issue. The company said the proof-of-reserves update would follow the end of the response work.