Aave reopens lending markets following Binance hack

Decentralized finance platform Aave has begun reopening its V3 and V4 lending markets after implementing a precautionary freeze. The restrictions were triggered by a major security breach at Binance, where attackers reportedly drained approximately $6.3 billion from hot wallets.

While Aave's own smart contracts were not compromised, the protocol froze new deposits and borrows for roughly 16 hours after an address linked to the theft used Aave to borrow ETH against stolen USDT. To mitigate risk during the reopening, Aave has tightened borrowing limits and adjusted interest-rate settings.

As of the reopening, most V3 pools on various networks have been unfrozen, though nine assets, including two major stablecoins, remain unable to back new loans. The AAVE token experienced significant volatility during the incident, dropping below key technical averages due to selling pressure from the attacker, but has since shown signs of recovery.