Aave freezes markets after Binance hack, $5.5B drained
4.2 Security Aave froze most lending markets after a suspected Binance hack. The attacker converted stablecoins to ETH, bypassing freezes. Over $5.5B was drained, with protocols acting to secure funds.
Aave has frozen most of its lending markets across several networks after a suspected large-scale hack involving Binance hot wallets. This move is intended to prevent stolen assets, especially AVAX and USDT, from being used as collateral to borrow other cryptocurrencies. The attacker reportedly supplied $60 million in USDT to Aave and borrowed 19,762 ETH, using protocols like Aave and Uniswap to convert stablecoins—which can be frozen by issuers—into Ethereum, which cannot be blocked. Ripple, Tether, and Circle have frozen billions in related assets, but over $5.5 billion has already been drained from Binance, marking the largest crypto hack to date. No vulnerabilities have been found in Aave or Uniswap. Aave's actions are precautionary, aiming to protect the ecosystem. The protocol plans to unfreeze markets in phases once fund flows stop, while continuing to monitor the situation and coordinate with stakeholders.
