Update, 1 November 2026, 11:59 UTC: Threshold now says tBTC is fully backed, citing 4,320 BTC in bridge wallets against about 4,185 tBTC in circulation, according to KuCoin’s summary of The Defiant’s report. It also says “no funds have been lost”, while minting and redemptions stay paused with no cause and no restart time. Our own read of tBTC’s Ethereum supply at 11:45 UTC on 1 November returned 4,185.155 tokens, which covers the tBTC side only: we have not checked the BTC side. Aave’s freeze is unchanged, and we found no further Threshold update at about 11:50 UTC.
Threshold Network stopped new tBTC minting and new Bitcoin redemption requests through its app by 00:17 UTC on Saturday 31 October at the latest, as a precaution while security maintenance is carried out, according to TokenPost’s report of its post on X. At 10:01 UTC that day the Aave guardian multisig froze tBTC on Aave V3 Ethereum Core, on the recommendation of risk provider LlamaRisk, according to LlamaRisk’s post on the Aave governance forum. No exploit has been disclosed, and Threshold has since said that no funds were lost and that tBTC is fully backed. It has still given no cause and no restart time, and no source we read links the pause to the Binance hack.
We still could not open Threshold’s own posts, so both of its statements reach us second hand: the first notice through TokenPost, whose report is time-stamped 00:17 UTC on 31 October, and the backing statement through KuCoin’s summary of The Defiant and a TokenPost report published at 18:05 UTC the same day. Threshold’s blog, forum and home page carried neither when we checked on 1 November. LlamaRisk confirms the pause itself and calls it pre-emptive. Nothing we read says when the maintenance began, when it should end or what the work involves.
Threshold says tBTC is fully backed: what we could check
Threshold cites 4,320 BTC in bridge wallets against about 4,185 tBTC in circulation, according to KuCoin’s summary of The Defiant’s report. The Defiant says six of the 44 active wallets in Threshold’s explorer hold 4,320.33 BTC, based on mempool.space records, and that Etherscan showed a supply of 4,185.16 tBTC.
We tested one half of that. A direct read of the tBTC contract’s total supply on Ethereum at 11:45 UTC on 1 November returned 4,185.155 tokens, in line with Threshold’s figure. That read covers Ethereum only and does not count versions of the token on layer-2 networks. The BTC side is unchecked: we did not open the Bitcoin wallets, so “fully backed” remains Threshold’s claim, and a balance alone would not tell us what the security issue is.
Threshold also says “no funds have been lost” and that it has seen no unauthorized minting. Bridge functions will return once “a full remediation is in place”, it says, without giving a time. Pending deposits and redemptions are to complete after that, and tBTC keeps moving normally on Ethereum and layer-2 networks.
Another update was promised within 24 hours, or sooner if anything changed. We found none at about 11:50 UTC on 1 November. We do not know at what hour on 31 October it made that promise, and the earliest report we found is stamped 18:05 UTC, so the 24 hours may not have run out when we looked.
What Threshold stopped, and what still works
According to TokenPost, new BTC deposits, tBTC minting and new redemption requests are all off in the Threshold app. Redemptions already in progress may still be paid out on Bitcoin, but their final settlement on Ethereum is paused, so some may be delayed. Holding, transferring and using existing tBTC is not affected.
TokenPost relays this guidance for users caught in the middle:
- Do not send BTC to a deposit address generated before the pause.
- Do not start deposits, minting or redemptions through other interfaces.
- If you already deposited, keep your receipts and transaction hashes, and do not repeat the transaction.
On restarting, TokenPost says only that Threshold will announce the time separately. We found no restart notice and no statement of cause at about 11:50 UTC on 1 November, on Threshold’s blog or forum or in a search of reports published since.
The date of the first notice needs a caveat. TokenPost’s report is stamped 8:17 pm EDT on 30 October, which is 00:17 UTC on 31 October, so the notice was out by then. KuCoin writes of an “initial pause notice on Oct. 30”, while LlamaRisk dates it 31 October. That may be a time-zone gap, since the evening of 30 October in New York is already 31 October in Asia, but we have not opened Threshold’s own post and leave the hour unconfirmed.
Aave’s tBTC freeze covers one reserve on one market
LlamaRisk said the aim is to keep Aave’s tBTC exposure from growing “until the incident is confirmed to be fully mitigated by Threshold”. It says it is in contact with the Threshold team. Its post, last updated at 10:26 UTC and published at 10:28 UTC, still had no replies at about 11:50 UTC on 1 November. A direct read of the reserve settings on Aave’s Ethereum Core blockchain that runs exactly as written when it is called, holding and moving funds according to its code, without an intermediary able to change the outcome.">smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">pool at 11:57 UTC that day still showed tBTC frozen.
The scope is narrow. tBTC is listed on Aave V3 on Ethereum Core, Base and Arbitrum, but the Base and Arbitrum reserves were frozen in earlier deprecation rounds, whose dates we did not find. That left Ethereum Core as the only place where tBTC could still support new borrowing. No other reserve is touched and no market is paused.
The vocabulary differs between the two sides. TokenPost’s report of Threshold’s post speaks of security maintenance. LlamaRisk writes of a pre-emptive pause, and in the same post of an “incident”. Neither term tells us what happened, and we draw no conclusion from the gap.
Gauntlet pulls back on Morpho and proposes zero tBTC caps on Compound
Aave is no longer the only lender reacting. KuCoin reports that Gauntlet put a tBTC-backed market used by its Ethereum Morpho USDC Core vault on its optimizer’s emergency exclusion list and withdrew about 65,000 USDC of available liquidity. About 640,000 USDC remains supplied, and Gauntlet warned that the redemption pause may affect tBTC liquidity and liquidation exits.
On Compound, Gauntlet recommended on 31 October setting the tBTC supply cap and borrow collateral factor to 0 on every market that lists it, across Ethereum, Base and Arbitrum. Its snapshot from 11:59 UTC that day counts 72 accounts supplying 101.2 tBTC, about $7.8 million, across six markets. Gauntlet says no account becomes liquidatable from the change, though 24 accounts with debt and only tBTC as collateral could not withdraw it until they repay in full or add other collateral. The post describes an on-chain proposal still to be submitted, and it shows no execution.
$136.5 million on Aave, $334.3 million in tBTC TVL: two different measures
KuCoin’s summary of The Defiant puts tBTC deposits on Aave’s Ethereum Core market at about $136.5 million. That figure is not in LlamaRisk’s post. DefiLlama’s Aave V3 pool data pointed the same way when we read it at about 11:55 UTC on 31 October, with about $136.4 million for tBTC on Ethereum.
DefiLlama put tBTC total staking or liquidity, measured at current market prices. It is the main size metric in DeFi.">value locked at $334.3 million in its reading stamped 10:19 UTC on 31 October. That number counts the bitcoin held by the protocol, while the Aave figure counts deposits on one lending market. They measure different things, so we do not turn them into a share. Its latest reading on 1 November, stamped 09:24 UTC, was $337.5 million, while Threshold’s 4,320 BTC would be worth about $336.5 million at the 11:50 UTC BTC price below. Numbers in the same range are a consistency check, not a proof of reserves.
tBTC price: no discount visible, on a thin test
Nobody we read reports a depeg. On 1 November, DefiLlama’s price feed listed tBTC at $77,967 at 11:22 UTC and, in a separate reading, BTC at $77,882 at 11:50 UTC. On 31 October it gave tBTC at $77,433 at 11:22 UTC and BTC at $77,442 at 11:47 UTC. Each pair was taken at different times, so we do not read a gap from them. All they support is that the feed shows no visible discount for tBTC, and a feed can lag thin trading.
What the freeze changes for tBTC borrowers
New tBTC deposits are blocked, and tBTC can no longer add borrowing power to any position. Repayments and withdrawals still work, liquidations keep running, and borrowing against other collateral is normal. tBTC keeps its liquidation threshold, so LlamaRisk says existing health factors do not change and the freeze itself makes no position liquidatable. Our guide to the Aave health factor and liquidation price shows how that number is calculated.
The freeze is much narrower than Aave’s response to the Binance hack, when guardians froze 292 reserves between 21:42 and 23:04 UTC on 29 October and repaying was the only way to raise a health factor. This time LlamaRisk says users can raise a health factor by repaying debt or adding additional collateral. Only new tBTC supply is blocked, so that collateral has to be another asset. The freeze does not protect anyone from a price move, though. LlamaRisk’s post says nothing about how a fall in tBTC would feed through Aave’s oracle, and a lower oracle price would lower health factors in the usual way.
How tBTC redemption and the peg arbitrage work
tBTC is a token on Ethereum meant to stand for one bitcoin each. It is a form of cross-chain bridge: deposited BTC is secured not by one custodian but by a randomly selected group of node operators, who need what Threshold’s documentation calls a “threshold majority agreement” before they can act on the coins. The documentation says the selection rotates bi-weekly.
Redemption is the way back. A holder gives up tBTC and asks for BTC at a Bitcoin address, and the operators sign the payment. The documentation sets the fee at 0.2% for both minting and redeeming, which stakers of the T token can partly or fully offset.
That two-way door is what normally holds the price. Take an illustration, not a market reading: if tBTC traded 1% under BTC, a trader could buy it, redeem it and keep about 0.8% before network fees and waiting time. If it traded above BTC, the same trader would deposit BTC, mint tBTC and sell. Each trade pushes the price back toward BTC.
Our reading, and it is analysis rather than reported fact: with both doors shut, that trade cannot be completed today. Holders who want out must sell to someone on an exchange, and the buyer is betting on redemptions returning. A discount could open if selling picks up. Nothing we saw shows that happening, and LlamaRisk says it is watching tBTC liquidity on secondary markets.
18 May 2026: the background Threshold already had
This is not Threshold’s first precaution this year. On 18 May 2026, Threshold says, attackers tried to mint tBTC without depositing bitcoin. The attempt failed, no tBTC was issued and Threshold called it a “zero loss event”. It then paused Optimistic Minting, the faster route, “until further notice” as a precaution against rising protocol-level attacks. All mints moved to the slower sweeping mechanism, stretching typical mint time to about six or seven hours from about 1.5 hours.
We found no notice that Optimistic Minting has returned. No source connects May’s attempt with this week’s pause, so it is context, not an explanation.
| Date (UTC) | Event | Source |
|---|---|---|
| 18 May 2026 | Failed attempt to mint tBTC without a BTC deposit; Optimistic Minting paused | Threshold |
| 31 Oct, 00:17 | TokenPost reports Threshold’s pause | TokenPost |
| 31 Oct, 10:01 | Guardian multisig freezes tBTC on Aave V3 Ethereum Core | LlamaRisk |
| 31 Oct, 10:28 | LlamaRisk publishes its post on the Aave forum | Aave forum |
| 31 Oct | Gauntlet recommends a tBTC supply cap of 0 on Compound | Compound forum |
| 31 Oct, 18:05 | TokenPost reports Threshold’s statement that tBTC remains fully backed | TokenPost |
| 1 Nov, 11:45 | Coindaro reads 4,185.155 tBTC of supply on Ethereum | tBTC contract |
What is still unknown about the tBTC pause
No funds have been lost, according to Threshold, which has disclosed no exploit or compromise, and no source we read reports one. That is not the same as an all-clear:
- No cause has been given, and nobody has said what the security maintenance consists of or whether a bug or attack attempt was found.
- There is no restart time for minting or redemptions, only Threshold’s condition of a full remediation.
- Full backing rests on Threshold’s word: we checked tBTC’s supply on Ethereum, not the Bitcoin wallets.
- It is not known whether Ethereum settlement of in-flight redemptions has stalled for anyone.
Nor is there any tie to the Binance hack. TokenPost’s report of the pause came about a day after those Aave freezes, but LlamaRisk’s tBTC post does not mention Binance, and neither do the reports we checked.
The next step on the Aave side is set out by LlamaRisk: once it has assurance that tBTC operations are back to normal, it will propose restorative measures in the same forum thread. It has given no date.