Soft Fork: Binance, Bitcoin, and reorgs

Binance exchange gets compromised 7000 BTC worth $40 million withdrawn by hackers

Due to the continuing legal action against Bitfinex for purportedly mismanagement $900 million of Tether's money funds in an effort to "hide" its loss of $850 million, many predicted the Binance hack to add to the disbelief of investors in the cryptocurrency market. All of its other wallets are "secure and unharmed", says the chief.

The largest crypto asset exchange on the planet announced it had suffered a major security breach earlier on Wednesday.

It was not until the platform's alarms went off that the management learnt about the illegal withdrawals of thousands of bitcoins with a total value of about $41,009,000. We will cover the loss from the #SAFU [safe asset funds] fund, there is enough.

"We are making significant changes to the API, 2FA, and withdrawal validation areas, which was an area exploited by hackers during this incident". The transaction is structured in a way that passed our existing security checks. What makes this even more serious is the fact that Binance is world's largest crypto exchange by trade volume.

In addition, Binance will soon add support for hardware devices, such as YubiKey and other devices.

"We must conduct a thorough security review". Sensitive user data was also mined, officials said.

Immediately after the attack was perpetrated, Binance suspended all deposits and withdrawals as a security measure to avoid more cryptos being stolen. The difference between the two is that a hot wallet is a digital storage that's connected online and is used for liquidity, while a cold wallet is bitcoin stored offline. At the time of the hack (Tuesday, May 7), the exchange said it expects this process to take about one week. SAFU is a Binance fund which was launched to protect users of the exchange "in extreme cases" and is funded by 10 percent of all trading fees charged by the exchange. It was unfortunate that we were not able to block this withdrawal before it was executed. In message, the company has reasoned that hackers can still control some accounts and their usage may affect the prices.

Bitcoin did take a minor dip of about 3%, but has since recovered and is again pushing back up to the $6,000 level, its highest point for six months.

"We beg for your understanding in this hard situation", Zhao wrote.

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