Binance posts summary of May hack

Posted 20 May, 2019

The head of the leading cryptocurrency exchange Binance, Changpeng Zhao has published on the company's website a report in which he provided details and comments regarding the early-May hack which caused a loss of 7,000 BTC. 

The platform's CEO stated that it has become clear what happened, though the company actually did not realize the range of this accident, risks and possible "cover agents" among the staff.

First of all, the platform suspended withdrawal services once the security monitoring system detected the breach. However, the users had the only hot issue – when the exchange may resume services and access to funds. 

"In the world of technology, you can never accurately estimate how long changes might take. It is quite different when you compare it to repeated, predictable work," he commented in the report, adding "I did not know how the community would react to a one-week withdrawal suspension, but luckily, being transparent paid off and we received tremendous support from our amazing community. "

The report also covers Zhao's bombshell regarding possible bitcoin blockchain reorganization as a way to recover after the hack. As he noted, such proposal came from Bitcoin Core developers which suggested: "a rollback in a 51% attack scenario, it never occurred to me that it is also technically possible to change one transaction". Seeing the reaction of the community, Zhao clearly understood that that was "a taboo topic".

Speaking about the repayment, the company management started estimating the ways of repayment victims of the hack attack just after it hit the platform. Once the experts assessed the extent of the losses, it was determined that Binance had enough its own funds to recover lost assets.

"So we did a quick calculation: if we were to help cover the losses for our users and for those projects, it would cost us roughly $6,000,000 USD. Putting that in perspective, while we only raised $15,000,000 two months prior, we spent a bunch of money and were barely cash flow neutral at the time. We decided to do it anyway...," he explained.

Along with exchanges that were ready to block deposits at hackers' wallets and other market experts that supported the platform, law enforcement bodies in many countries reportedly offered assistance, especially since Binance assisted them in similar hacker cases earlier.

He highlighted that this accident helped the platform to become even more secure in all aspects of the business.

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