Bitcoin, ETH, and BNB Prices Drop Sharply Amid Binance Hot Wallet Breach Reports

Bitcoin, Ethereum, and BNB posted sharp declines on October 29 as reports of large outflows from Binance-labeled hot wallets triggered widespread selling and forced liquidations.

The price action intensified after Tether and Circle froze roughly $1.8 billion or more in stablecoins linked to the transfers, while former Binance CEO Changpeng Zhao stated that the movements looked like a hack even as the exchange confirmed user funds remained safe.

Traders reacted to the combination of on-chain data and official statements, with BNB absorbing some of the heaviest losses among major assets.

The moves added to earlier caution in crypto markets following the Federal Reserve’s latest rate decision and weakness in technology stocks. Within roughly an hour of the outflow reports circulating, leveraged positions faced significant pressure.

Price Declines and Liquidations

Aggregated market data from CoinGecko shows that Bitcoin fell toward and briefly fell to $78,7000, declining about 3% in the initial wave of selling. Ethereum slipped under $2,240, with losses exceeding 4% in some readings as traders reduced exposure.

BNB, the native token of the Binance ecosystem, dropped as much as 9% in a short period before partial recoveries, making it one of the more volatile major assets during the episode.

The rapid declines triggered substantial liquidations across perpetual futures markets. Coinglass data indicated that crypto liquidations reached over $1 billion within hours, with the large majority consisting of long positions.

Binance itself accounted for a significant share of the forced closures as traders responded to the outflow headlines and subsequent freezes. One of the larger individual liquidations involved an $11 million Bitcoin long position. Short sellers saw relatively limited losses by comparison, highlighting the one-sided nature of the initial reaction.

These price moves reflected the speed with which unverified reports of exchange wallet activity can cascade through leveraged markets. Bitcoin and Ethereum held above deeper support levels as official communications circulated, while BNB remained sensitive to any further updates regarding the platform. The episode marked one of the more notable intraday volatility events for the three assets in recent weeks.

Outflows, Freezes, and Market Reaction

On-chain records, tracked and highlighted by BlockAid, showed substantial transfers leaving addresses associated with Binance hot wallets on Ethereum during the evening of October 29. The activity involved large quantities of ETH, USDT, USDC, and other tokens directed to newly created addresses. Some recipient wallets were linked to funding via Tornado Cash, a detail noted by blockchain monitors that heightened concerns among traders.

Tether blacklisted addresses holding significant USDT balances. Tether CEO Paolo Ardoino posted on X that the company had frozen more than 1.567 billion USDT related to a potential Binance exchange hack. Circle froze approximately $823 million in USDC tied to the same set of addresses. Together these actions immobilized a major share of the stablecoins that had left the hot wallets, although some amounts, including portions converted to ETH, had already moved before the blacklists were applied. Stablecoin issuers can restrict transfers of their own tokens but cannot freeze native assets such as ETH or Bitcoin in the same way.

Changpeng Zhao wrote on X that “user funds are safe” and that “it does look like a hack on Binance.” He thanked Tether and Circle for the rapid freezes of roughly $971 million in USDT and $823 million in USDC and noted that, while he no longer manages Binance.com, he expects as a shareholder that all user funds will be fully covered. Binance’s official account stated that its teams were aware of reports of a potential security issue and were actively investigating. The exchange later confirmed that user funds were completely safe while the review continued and advised users to remain cautious of scams.

The sequence of labeled outflows, issuer freezes, and statements from Zhao and Binance formed the core of the selling pressure. Similar issuer actions have appeared in other recent cases involving large wallet movements, including earlier Tether freezes tied to outflows. While those prior actions involved far smaller amounts, they demonstrated the same on-chain mechanism now applied at a much larger scale.

Binance has historically maintained a Secure Asset Fund for Users (SAFU) as a reserve for covering potential losses in confirmed incidents. The company has not indicated whether the fund would be drawn upon in the current case, consistent with its statement that no impact to user funds had been confirmed. The investigation remains active, and the exchange has said it will provide updates through official channels once verified information is available.

Also read: Binance Hack: CZ Says Exchange Appears Hacked, Assures User Funds Are Safe