Binance recently experienced some major fluctuations in their market, experiencing $1.5 billion in trading volumes within just a single day. However, with that major surge in activity, there has been many discrepancies with a multitude of API users.
— Binance (@binance) July 4, 2018
One major coin experiencing this “problem” is Syscoin. Typically, the coin trades at two cents, but the price rose to 96 BTC, making it worth around $500,000. Experts at TrustNodes are not exactly sure what has happened, but some APIs appear to have been compromised. In an effort to better defend its users, the first step they took was to reset everyone’s API keys and recommend that they pay closer attention to their private information.
Along with this advice, Binance has released SAFU. Binance says,
“To protect the future interests of all users, Binance will create a Secure Asset Fund for Users (SAFU). Starting from 2018/07/14, we will allocate 10% of all trading fees received into SAFU to offer protection to our users and their funds in extreme cases. This fund will be stored in a separate cold wallet.”
The announcement of SAFU follows suggested practices that exchanges keep funds in reserve in the event of hacking or theft, though Binance has not been a victim of these issues yet.
The CEO of Binance, Changpeng Zhao, is a hacker himself, helping him to capture some hackers several months ago, but that has not seemed to deter them from the cryptocurrency world. Luckily, they will not be safer from attacks, as Binance implements an insurance policy. It is uncertain if resetting the APIs will help to protect users at the moment.
Still, Binance remains a relatively safe place to store tokens, which is just shown by the way that Bithumb gravitated to the platform after an XRP theft. However, the easiness of the theft could have been the catalyst for Japan’s FSA warning. Zhao proposed solutions the involve Uganda, but many investors do not want to associate the crypto economy with this part of the world.
This is a chance for Binance to beat their competition – Coinbase. The regulatory measures that Binance may push them ahead, but it will depend on how the course of events plays out.