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How Aave Froze Lending After the Binance Hack—and Reopened V3 and V4
A wallet linked to the Binance hack supplied 60 million USDT and borrowed 19,762 WETH—about $44.6 million—before Aave froze new supply and borrowing. During the freeze, users could still withdraw, repay and liquidate positions; Aave said its contracts were unaffected.
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Key takeaways
- A wallet linked to the Binance hack supplied 60 million USDT and borrowed 19,762 WETH—about $44.6 million—before Aave froze new supply and borrowing.
- During the freeze, users could still withdraw, repay and liquidate positions; Aave said its contracts were unaffected.
- Binance estimated the incident’s impact at about $6.3 billion and reported roughly $3 billion frozen on chain.
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openai.comCreate a landscape editorial hero image for this Studio Global article: How did Aave, the largest decentralized lending protocol, respond to the October 29–30 Binance hack and reopen its V3 and V4 markets, includ. Article summary: Aave’s response was a precautionary restriction on new lending activity, not a response to an exploit of its own contracts; it subsequently reopened V3 and V4 on October 30.[2][9] Binance put the incident’s impact at abo. Topic tags: general, general web, user generated. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts with fa
Aave’s emergency response to the October 29 Binance hot-wallet incident was to restrict new lending activity across much of V3 and V4—not to pause the protocol entirely. The move followed a Binance-linked wallet’s use of Aave to borrow 19,762 WETH against 60 million USDT. Aave reopened its V3 and V4 markets the next day, while keeping nine tokens at zero loan-to-value (LTV), which prevented them from serving as collateral for new borrowing.1
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The attacker borrowed before Aave’s freeze
Aave’s incident report says a Binance hot wallet made a large Ethereum transfer at 20:24 UTC on October 29. Between 20:58 and 21:01 UTC, a wallet in the exploiter’s cluster supplied 60 million USDT to Aave V3 Ethereum Core and borrowed 19,762 WETH, valued at about $44.6 million at the time.1
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The borrowing happened before Aave’s emergency restrictions. Reporting later said the position remained open and was close to liquidation; the available material does not show that reopening Aave markets reversed or settled the loan.1
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What Aave froze—and what users could still do
Aave guardians froze 175 reserves on V3 across 16 networks and 117 reserves on V4 across four networks. The reported execution window was 21:42–23:04 UTC on October 29.1
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The restrictions blocked new supply and borrowing in affected reserves. Withdrawals, repayments and liquidations remained available, and reporting said no market was paused.1
5 In other words, the freeze constrained new activity without preventing users from managing existing positions through those actions.
Aave said its contracts were unaffected and existing positions remained fully collateralized.15 That is not a guarantee that every borrower was safe from liquidation: liquidations remained available during the freeze, and the attacker’s reported position was still open.
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V3 and V4 reopened the next day
Aave reported reopening all V3 and V4 markets on October 30. Nine tokens remained at zero LTV, meaning they could not be used as collateral to support new borrowing.2 The available reporting confirms the reopening date, but not the precise transaction time for each market.
Aave also adjusted interest-rate parameters while markets were frozen. In an October 30 update, its Risk Stewards said they had lowered the high-utilization Slope2 rate on major stablecoin reserves and WETH on the V4 Ethereum Core Hub, so the borrow rate at full utilization would not exceed 10% APR. The update said supplier withdrawals had pushed affected reserves to 92%–100% utilization while new supply was blocked.17
Binance’s loss estimate and frozen funds were different measures
Binance estimated the incident’s total impact at about $6.3 billion and reported roughly $3 billion frozen on-chain. Those figures describe the estimated impact and assets frozen—not an amount confirmed as recovered and returned to users.9
Binance separately said it would cover losses through its SAFU fund and company funds. CEO Richard Teng later said more than $6.34 billion had been reserved, including $5 billion already held in affected tokens such as USDC, USDT, BTC, ETH and BNB.21 The available material does not establish a guaranteed timeline for recovering every frozen asset.
The clearest account of Aave’s response is therefore a precautionary lending freeze followed by a staged return to activity: the attacker’s borrowing had already occurred, users retained key options for existing positions, and all V3 and V4 markets reopened the next day with nine tokens still excluded as collateral.1
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What is the short answer to "How Aave Froze Lending After the Binance Hack—and Reopened V3 and V4"?
A wallet linked to the Binance hack supplied 60 million USDT and borrowed 19,762 WETH—about $44.6 million—before Aave froze new supply and borrowing.
What are the key points to validate first?
A wallet linked to the Binance hack supplied 60 million USDT and borrowed 19,762 WETH—about $44.6 million—before Aave froze new supply and borrowing. During the freeze, users could still withdraw, repay and liquidate positions; Aave said its contracts were unaffected.
What should I do next in practice?
Binance estimated the incident’s impact at about $6.3 billion and reported roughly $3 billion frozen on chain.
Sources
binance.comAave freezes new deposits and borrows on V3 and V4 after ...
cryptotimes.ioAave Unfreezes V3 and V4 Markets After Binance Hack, Keeps 9 Tokens at Zero LTV
governance.aave.comBinance Hot Wallet Exploit: Aave's Response - Risk - Aave
elliptic.coThe largest theft in history: North Korea likely behind the $6.4 billion ...