On May 7th 2019, Binance has announced the identification of a security breach which led to the withdrawal of 7000 bitcoins. According to the official blog post, the hackers have been able to obtain “API keys, 2FA codes, and potentially other info”. This marks the first time when the exchange gets hacked, and sets a precedent in terms of public relations and trust.

More specifically, the news about the incident broke from official sources, and it was after a scheduled maintenance that the information was made public by both the Binance blog and the exchange’s CEO Changpeng “CZ” Zhao.

About two hours later after this seemingly self-assuring post, it was revealed that 2% of the “hot wallet” BTC holdings have been stolen. It turned out that 7000 bitcoins were not as #safu (a meme-able jargon for “safe”) as initially expected. Yet as a way of making the situation transparent and possibly regain the trust of traders and investors, the malevolent transaction has been made public for everyone to see. You may view it on the Blockchain.info block explorer by clicking this link.

Details about the Binance hacking and its aftermath. Are funds still #safu?

According to the blog post, the hackers have used multiple accounts in order to orchestrate a well-timed attack which passed the security checks without being blocked, but rang the alarm nonetheless. Consequently, a thorough investigation will be made by the exchange’s security experts, and it’s estimated that Binance will not allow deposits and withdrawals for an entire week. On the other hand, internal trades between various cryptocurrencies will go on as usual.

In spite of this attack, CEO Changpeng “CZ” Zhao is committed to be transparent, reveal every step of the investigation, and even carry on with the scheduled Twitter AMA (Ask me anything).

Binance also promised that the #safu fund will cover the incident in full, so that no user balances and portfolios get affected. At press time, 7000 bitcoins are worth about $40.63 million.

Community reactions

While some members of the crypto community have praised the transparency and the willingness to make sure that no user suffers any losses thanks to the so-called #safu insurance fund, others were eager to point out that Binance’s clean slate has been tainted by this unexpected hacking.

For instance, prolific meme creator Crypto Meme Central has taken his time to portray a helpless Binance CEO Changpeng “CZ” Zhao whose vault of bitcoins gets raided by an anonymous thief.

On the other side of the debate, a large number of Twitter users have posted positive messages which praise the open head-on approach. Most of them can be found right below the CEO’s official announcement, and Alex Beadi’s is representative for most reactions displayed in the comments section.

The views and opinions expressed in the article Binance no longer #safu: Hackers steal 7000 BTC do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research..

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