Bitcoin, Crypto currency, Blockchain

Binance CEO Zhao gives an Insider’s view on the Binance Hack Happen

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Binance CEO Zhao gives an Insider’s view on the Binance Hack Happen

Home News Binance CEO Zhao gives an Insider’s view on the Binance Hack Happen

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Marcel Knobloch –
21.05.2019

In a new blog post Binance CEO Changpeng Zhao tells the story behind the Binance Hack, how to Binance Team has handled in the last two weeks and how the hackers 7,000 of Bitcoin to the value of $ 40 million from one of the Hot Wallets of the stock exchange have stolen.

Binance CEO Changpeng Zhao had a simple way to describe his mental state after the massive Hack earlier this month:

I’m not going to deny it. My first reaction was: “Fuck!” the second and third reaction were also the same. A few moments later I come to terms with it started: Well, this is shit! What do we do now? A lot of people are waiting for me, some of the instructions, other information and others on reassurance. There is much to do, let’s just move on.

After 10 seconds in a state of’Fuck, Fuck, Fuck, Fuck, I performed a quick mental calculation. Of 7,000 BTC, well, I know that we are alone in our own BTC funds more than that. It is not enough. A second calculation calmed me down, it was about the Same as a Coin Burn, we have about a year ago, not that big of a deal.

CZ also stressed on several occasions that transparency and constant communication will help him to reduce the potential reputation damage:

Get a Live video stream in a time of crisis. Your users deserve to know not only what happened, but also what you do to deal with this, including the possibility that you can assess your state of mind itself.

CZ also spoke about the thought process behind his much-discussed “Reorg”-idea, which would have included trying to get 51% of the miners who operate the Bitcoin network, to the affected Bitcoin to make transactions to undo and reorganize. After the attack, Zhao was planning an Ask-me-anything session:

Prior to AMA, I had been awake all night and felt the effects. So I made a short time before the AMA is a 15-minute NAP. When I woke up, told my Team that there was an interesting proposal from a Bitcoin Core developer. I read it for a few seconds. It was a so-called “Reorg”. While I know that it is technically possible to roll back in to a 51% attack scenario, it came to me never in the sense that it is also technically possible to change a transaction and keep all the other transactions intact, while at the same time, the mountain people are hugely motivated. The discussion was on Twitter pretty hot, so I mentioned it in the AMA as something that has been proposed. I didn’t know it was a taboo subject. Lesson learned.

Zhao had the idea, but quickly fall and even went so far as to say that it was “not possible”. After the Hack Zhao notes that the Hacker gains the control of multiple user accounts, and large withdrawal requests that have bypassed the checks of the risk management of Binance prior to the withdrawal. Zhao tweeted that the payment server of Binance were in unscheduled maintenance mode, and the Team of the stock market continued the investigation. After they were relatively sure that only one transaction was affected, they decided to inform the Public about the incident, and estimated that the payouts would be suspended for a week.

In the world of technology, you may be able to estimate exactly how long changes take. It is quite different when you compare it with repeated, predictable work. Regardless of our users and the Community needed a cost estimate, and as soon as they were informed, it was a target date for our Team. I don’t know how the community on a one-week stop-Payment order would react, but fortunately, has paid off the transparency, and we received tremendous support from our amazing community.

Looking into the future, Zhao said that the Hack might actually be a “blessing in disguise” have been:

Security is an infinitely important in practice; there are always improvements. We have implemented in the past week, many of them on this and will implement more in the future. Through this incident, Binance has become actually much safer than previously, not only in the affected areas, but as a whole.

Featured Image: ymcgraphic | Shutterstock

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