Crypto market reels after $6.3B Binance hack triggers mass liquidations

The massive security incident at Binance, which saw the exchange suspend withdrawals to contain an estimated $6.3 billion in affected assets, served as the primary catalyst for the market downturn. While Binance has pledged to cover customer losses and successfully froze roughly $3 billion of the stolen funds with industry partners, the initial breach ignited a rapid liquidation event. According to CoinGlass, approximately 246,482 traders saw their positions forcibly closed, with long-position holders betting on rising prices bearing the brunt of the $1.55 billion total loss.

Bitcoin dipped below $77,000 during the Thursday selloff, while Ethereum briefly fell under $2,200. Altcoins faced even sharper declines, with XRP and BNB shedding 7% or more in value. The market instability was further compounded by broader macroeconomic pressures, specifically ongoing concerns regarding Federal Reserve interest rate policy, which had already left investors on edge. Although prices showed signs of stabilization by Friday, with Bitcoin clawing back toward $78,500, total crypto futures open interest dropped to $136.3 billion as traders moved to reduce their market exposure. Blockchain analytics firms TRM Labs and Elliptic have reportedly linked the sophisticated attack to hackers associated with North Korea, casting a long shadow over the exchange’s security infrastructure.