Secure Asset Fund for Users will be used to cover for the 7000 Bitcoin hack from Binance

Secure Asset Fund for Users will be used to cover for the 7000 Bitcoin hack from Binance

May 8, 2019 Off Maheen Hernandez By Maheen Hernandez

Hackers stole about 7000 Bitcoin from Binance.  This, Binance states is a security breach at a large scale.  The breach was discovered on May 07, 2019.

Changpeng Zhao, CEO of Binance in his letter stated that the hackers were able to gain access to API keys, two-factor authentication codes, and other information. Eventually, they managed to withdraw $41 million in Bitcoin from the exchange. 

This disclosure came after Zhao tweeted about how the exchange was undertaking “some unscheduled server maintenance.”  He further added that the funds were safe. After the information was disclosed, Zhao stated that they would provide a full update in a short period of time.

Zhao stated that the exchange might not have identified all the accounts that were impacted.  The breach had taken place at the level of the hot wallet consisting of 2% of the overall funds of the exchange.  The rest of the wallets were declared to be secure and unharmed.

He further added: 

“The hackers had the patience to wait, and execute well-prepared actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed.”

The sooner the hacking even was executed the internal alarms were executed, and Zhao stated that the exchange had actually frozen withdrawals following the discovery of the hacking.  The deposits and withdrawals stay suspended for the next week.

Cautions stated, “the hackers may still control certain user accounts.”

Binance is set to perform an “a thorough security review” thus consisting of systems and data for the next week.

The SAFU “Secure Asset Fund for Users” will be used to cover up for the losses, which might not impact the users per the notice.

The SAFU consists of 10% fund all the trading fees that are normally absorbed by the exchange.  This fund was initially launched to protect Binance’s users “in extreme cases.”   They stored their own cold wallet.

Zhao stated, “In this difficult time, we strive to maintain transparency and would be appreciative of your support.”

He further concluded his letter by stating that he will be participating in the “ask-me-anything.” Scheduled on Twitter.

The markets have until now responded to Bitcoin price post the incident.  The native currency of Bitcoin BNB is down by 8.05% and does not seem to be able to escape the current controversy.

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