Compound Pauses Supply on Its Biggest Markets as the Binance Incident Unfolds

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• Gauntlet paused supply on Compound V3’s major markets across Ethereum, Optimism, Arbitrum and Base, citing an ongoing incident on Ethereum mainnet
• The pause covered widely used assets including USDC, USDT, USDS, WETH, wstETH and WBTC on Ethereum, with narrower lists on the three layer-two networks
• Withdrawals and liquidations continued without interruption, and a follow-up post clarified borrow repayments stayed available on the layer-twos while remaining paused on Ethereum itself

Risk management firm Gauntlet posted to Compound’s governance forum on October 29, 2026 at 11:09 PM UTC announcing that supply had been paused across Compound V3’s major markets as a precautionary measure while the Binance-linked security incident was still unfolding. The post describes the step as a response to “an ongoing incident on Ethereum mainnet,” without naming Binance directly, and frames it explicitly as precautionary rather than a response to any direct loss on Compound itself.

The pause touched a wide range of markets. On Ethereum, it covered USDC, USDT, USDS, WETH, wstETH and WBTC. On Optimism it covered USDC, USDT and WETH, and the same three assets were paused on Arbitrum. On Base, the pause covered USDC and WETH. Pausing supply prevents new deposits into these markets but does not by itself change anything for existing positions.

Gauntlet’s post is explicit that withdrawals and liquidations were not affected by the pause on any of the four networks, meaning users could continue to pull out their existing supplied assets and the protocol’s liquidation mechanics kept functioning normally throughout. That distinction matters for a lending protocol during a market-wide security event, since halting withdrawals entirely would raise far more serious concerns about user access to funds than a temporary pause on new supply.

A follow-up update posted at 2:59 AM UTC on October 30 clarified the status of borrow repayments specifically, noting that they remained available on Optimism, Arbitrum and Base but were paused on Ethereum itself during the incident. The original post did not address whether users could still add collateral to existing positions, and at least one forum comment suggested collateral additions were also blocked, though that claim conflicts with Gauntlet’s own official wording, which focuses specifically on repayments rather than collateral. Compound’s cautious, market-by-market response mirrors the approach several other lending protocols took on the same day, each weighing the risk of leaving markets open against the cost of briefly restricting new activity while the underlying incident was still being assessed.

The updates are posted on Compound’s own governance forum, where Gauntlet has continued to provide status changes as the underlying incident develops.