Binance Lost Over $40 Million. Why is that case encouraging?
A few days ago, the largest cryptocurrency exchange in the world, Binance lost more than 7,000 BTC. Hackers once again found a way to breach the security of the trading platform. What does it mean for clients? Does it even matter? What to take from that situation?
Last time, I wrote a column about the Bitfinex case and lack of trust. Today, we have to talk about lost assets once again.
Like only 7,000?
“A large security breach,” that is what Binance named the loss of over 7,000 bitcoins. On May 7th, hackers stole that amount of cryptocurrency from the world’s largest trading platform by volume. Thieves got access to users’ API keys, two-factor authentication codes, and perhaps other info.
So, another exchange got screwed by hackers. It happens. Nothing unusual. Just another Tuesday, right? So, what differs that from other thefts?
A few things, honestly.
A community gathers
What happened after the information about the security breach, is at least quite interesting. The crypto community teamed up and made a strong statement. Many influential people from the industry supported the exchange and promised any help if needed.
Justin Sun, the chief of TRON, claimed that he would deposit 7,000 BTC worth money on Binance.
Changpeng Zhao said that while is it appreciated, it isn’t needed. He said that the exchange will use funds from SAFU (Secure Asset Funds for Users) to cover the losses. It means that users won’t lose anything. As Zhao said, Binance is “hurt, but not broken.”
After that, many other exchanges lent a helping hand, including Coinbase. Even John McAfee offered his help.
The controversial crypto guru even encouraged his rival to join him.
Not hunting for thieves
What also differs that case from many others, Binance won’t pursue hackers. Changpeng said that they analyzed all the pros and cons of the situation. The exchange could revenge the hackers by moving the fees to miners. However, this situation could damage the credibility of Bitcoin, which would split the community. Also, hackers helped to discover some weak points in Binance’s design.
The platform’s boss also acknowledged that it is a valuable lesson. After all, the exchange is responsible for the safety of users’ funds in the end.
The theft won’t hurt that much. At least financially. The hack of Binance is the sixth biggest in history, but the platform should cover that loss in less than 50 days. So far, hackers have stolen $1.35 billion from exchanges. However, what is important, Binance tries to be transparent with that and they has taken us through the whole process.
What is even more reassuring, is the fact that the price of Bitcoin hasn’t dropped after the theft. We may be witnesses of a new approach to hacks and robberies from the cryptocurrency market. Binance showed that the crypto community is powerful, and only with the help of others cryptocurrencies can be developed into something more, something great. And that is the encouraging part of it.
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