Samsung also advised all customers with an original or replacement Galaxy Note 7 to "power down and stop using the device" immediately -- a warning echoed by the head of the US Consumer Product Safety Commission, Elliot Kaye.
"No one should have to be concerned their phone will endanger them, their family or their property," Kaye said in a press release.
Samsung's decision to halt sales and exchanges was "the right move", Kaye said, adding that his commission was actively investigating reports of phones overheating and burning in multiple US states.
The US Federal Aviation Administration issued a guidance update, urging all passengers to power off, and not use, charge, or stow in checked baggage, all Samsung Galaxy Note 7 devices -- originals or replacements.
- Management woes - Analysts have suggested that Samsung, battling ever-fiercer competition in the saturated smartphone market, may have rushed production of the Note 7 because of the recent release of the iPhone 7 from bitter rival Apple.
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The top-of-the-line Note 7 was crucial to Samsung's growth plans this year. The company is struggling to boost sales, squeezed by Apple in the high-end sector and by Chinese rivals in the low-end market.
Linda Sui, wireless smartphone strategies director at Strategy Analytics, estimated that Samsung could lose "$10 billion or more" over the recall.
"And the impact on brand image and consumer confidence will be even worse," Sui said, adding that Samsung might be forced to consider junking the Note 7 completely.
The crisis has shone a spotlight on Samsung's management at a time when it is navigating a tricky generational power transfer within its founding Lee family.
Samsung is also under pressure from one of its shareholders, the activist US hedge fund Elliott Management run by billionaire Paul Singer.
In a detailed proposal unveiled last week, Elliott laid out a strategy for streamlining Samsung, splitting the company in two, dual-listing the resulting operating company on a US exchange and paying shareholders a special dividend of 30 trillion won ($27 billion).