Binance suffered the largest theft in its history, with $6.3 billion in assets stolen, yet the incident unexpectedly generated hefty profits for a small group of fast-moving traders. The more panicked the hackers became, the more they lost, and the quicker traders were able to profit.
According to a Tuesday report, hackers eager to cash out their stolen funds were willing to settle at steep discounts, leaving a trail of price mismatches across multiple blockchains and trading platforms. Blockchain data firm Bitquery estimated that the attackers incurred execution losses of roughly $119 million due to their rushed selling. A substantial portion of that money flowed into the pockets of arbitrageurs who had been lying in wait.
After discovering the security breach on October 29, Binance immediately suspended withdrawals, a move that inadvertently deepened market fragmentation梩he cross-platform price gaps that would normally vanish within seconds were forced to persist for minutes or even hours, giving traders a window of opportunity. Data from blockchain intelligence firm TRM Labs shows that Tether and Circle froze approximately $1.8 billion worth of stablecoins on the Ethereum chain about 40 minutes after the attack occurred, but by then the hackers had already frantically completed a large volume of token swaps.
Hackers' Desperate Trades: Dumping Stablecoins at Any Price
After seizing control of Binance's funds, the attackers' primary objective was to dispose of the stablecoins among the stolen assets. Since stablecoins like USDT can be frozen by their issuers, the hackers had to race against the freeze order to convert them into assets that could not be traced or reclaimed, such as Ether.
Within about half an hour, the attackers began aggressively swapping tokens through decentralized exchanges like Uniswap, buying heavily wherever there was liquidity, regardless of price. This "cost-be-damned, one-directional stampede" created extreme price distortions in decentralized markets that were already thin on liquidity.
Luca Parlamento, founder and chief investment officer of D2 Finance, said his firm spent the entire night operating on "the other side of the hacker's trades." He revealed that the attackers' average cost for buying Ether through decentralized exchanges was about $2,657, while the quoted price on cryptocurrency derivatives platform Hyperliquid during the same period was only around $2,300. "That spread was supposed to be ours to fill," Parlamento said.
James Aitchison, chief investment officer of Caerus Global Management, described the market condition as "a single seller with enormous capital and extreme price insensitivity forcing its way out of positions in thin liquidity." He said this aggressive one-way selling created multiple significant mismatches across different trading venues and blockchains. "We traded around this event and found several highly attractive mismatch opportunities."
Arbitrageurs' Textbook Play: 25% Profit in Five Minutes
For traders who already had capital deployed on the relevant platforms, the logic was simple and direct梥ell where the hackers pushed prices up, buy where prices were unaffected, and pocket the difference.
Annanay Kapila, a former quantitative trader and founder of derivatives exchange QFEX, spotted the signal while working at his office in central London. He noticed that Ether's price on decentralized exchanges was surging sharply, with some quotes briefly exceeding $3,000. Kapila immediately borrowed a large amount of Ether on decentralized lending platform Aave using stablecoins as collateral, then sold it all on exchanges where prices were elevated. He said the entire operation was completed within five minutes, yielding a 25% profit.
Kapila noted that cryptocurrency market volatility has flattened in recent years, making such opportunities increasingly rare, with the last similar window dating back to a market crash in October 2025. "The crypto market has been somewhat quiet this year. Whenever a major market imbalance occurs, it brings enormous opportunities," he said. "I've been in the game since 2021, when this kind of thing happened almost every week, but now it's relatively rare."
Bots' Price War: Fees Soar, Half the Gains Snatched by Algorithms
The hackers' panic didn't just affect Ethereum; it spread to other chains and tokens as well.
Aitchison revealed that on the Tron chain, the attackers used the small decentralized platform SunSwap to buy approximately 638 million TRX across 16 transactions at an average price of about 36.7 cents, while the market average at the time was around 33 cents. This buying spree briefly pushed the pool's price more than 18% above the broader market, and the price gap took about 10 hours to fully close.
Another notable anomaly appeared in Ripple's dollar stablecoin RLUSD梩he attackers suddenly dumped $48 million worth of RLUSD into an extremely shallow buy-side pool, causing its price to instantly drop to 81 cents before quickly returning to its $1 peg within minutes.
Such significant price mismatches quickly triggered fierce competition among trading bots. Because blockchain networks prioritize transactions based on gas fees paid, algorithms competed to bid up fees for priority execution, driving network costs sharply higher.
According to Bitquery, of the approximately $119 million the attackers lost due to poor execution, about half was captured by traders and arbitrage bots; another roughly $29.5 million flowed to Ethereum block validators in the form of fees, as they profited from the bidding war among bots.
Not Everyone Jumped In: Entry Barriers Determine Profit Ceilings
Not every institution chose to participate in the fray. Rajiv Sawhney, head of international portfolio management at Waves Digital Assets, said his team monitored the price discrepancies throughout but ultimately chose to stay on the sidelines. He noted that the biggest profit opportunities belonged to those institutions that had already positioned their capital in the right places beforehand.
Sawhney also highlighted the limitations of this trade: the window was extremely brief, transaction costs soared during the event, and some lending markets began tightening activity restrictions as the night wore on.
Binance began phasing in withdrawal resumption on Sunday and said it worked with industry partners to freeze approximately $3 billion in related assets, using its own funds to cover the stolen losses.
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