Aave freezes Avalanche lending markets to block suspected Binance hacker

The DeFi lender moved to stop stolen AVAX from being used as collateral after a suspected multi-billion-dollar outflow from Binance hot wallets Aave has frozen its lending markets on Avalanche. The goal is to stop a suspected Binance hacker from using the protocol to borrow funds. The move follows what appears to be a large unauthorized outflow from Binance hot wallets. Initial assessments suggest around $3.3 billion has moved across multiple chains. What happened The suspected drain began at approximately 20:24 UTC on October 29, 2026. Funds were then moved across several blockchains. A significant chunk landed on Avalanche. Approximately 1.81 million AVAX and 8.4 million USDT have been linked to the incident. That AVAX stash is the reason Aave acted. A hacker holding that much of a chain’s native token has an obvious move available: deposit it into a lending protocol as collateral, then borrow other assets against it. By freezing its Avalanche markets, Aave aims to deny the hacker access to that route. The protocol’s stated concern is potentially tainted collateral, along with the misuse of any borrowed funds. Binance has characterized the events as a hack. The exchange has said ...