Hacked 2% of Binance’s BTC Holdings will be covered in “Full” by SAFU Funds, Withdrawals Halted
- Deposits & withdrawals suspending for about a week while trading continues
- Bitcoin back above $5,800 while BNB down nearly 6%
As we reported, the largest cryptocurrency exchange Binance suffered a “large scale security breach” on May 7. The hackers were able to obtain a large number” of 2FA codes, API keys among other potential info through phishing, virus, and other attacks.
7000 BTC amounting to over $40 million has been stolen as well in a single transaction.
This was the result of Binance’s BTC hot wallet being targeted that contained
“2% of Binance’s total BTC holdings.”
2 percent is a lot when your the worlds largest crypto exchange. No way to spin this as good. Will certainly bring more scrutiny from regulators. https://t.co/uqFH3tStCp
— Michael Novogratz (@novogratz) May 7, 2019
Binance ensures all other wallets are unharmed and secure. Moreover, Binance will be using SAFU fund – which involves 10% of trading fees – to cover the incident “in full” and further states in the official announcement that
“no user funds will be affected.”
Funds are literally SAFU!!
SAFU stands for Security Assets Fund for Users. It is an insurance fund that was setup exactly for this purpose.
— Mati Greenspan (@MatiGreenspan) May 8, 2019
The community is happy and commending Binance for its SAFU funds that will help to recover the losses. However, crypto trader and investor, DonAlt say this might not be good for the Binance Coin (BNB) holders as SAFU funds consist out of BNB. And in order to pay for the lost BTC he says, these BNBs might be sold out.
If that is true, it'd be kind of ironic that the people paying are the ones celebrating.
— DonAlt (@CryptoDonAlt) May 8, 2019
The exchange is currently conducting a security review that is estimated to take a week and till then deposits and withdrawals will remain suspended but trading will continue.
Not the best of days, but we will stay transparent. Thank you for your support!https://t.co/Y1CQOatEpi
— CZ Binance (@cz_binance) May 7, 2019
Hours after the breach and reporting about the incident, Binance CEO, Changpeng Zhao personally took questions from Twitter in a live video. The level of transparency and quick response is shown by Binance is being appreciated by the crypto community.
Meanwhile, Tron founder and BitTorrent CEO Justin Sun offered to support Binance depositing 7000 BTC worth USDT to buy “$BNB, $BTC, $TRX, & BTT.” However, Zhao politely declined to state that currently there is no need, adding
“We will cover the loss from the SAFU fund, there is enough. We are hurt, but not broke.”
Sorry Justin, deposits are currently frozen for Binance for at least a week
Might want try pumping your ego another way
— Josh Rager 📈 (@Josh_Rager) May 8, 2019
“Appreciate the “unitedness” of our industry to fight hackers and fraud,”
said Zhao while stating that a number of partners are pledging to support Binance and exchanges like Coinbase, have pledged to block the deposits from those addresses.
Zhao also shared that he is no more considering pushing for a rollback of Bitcoin network.
— CZ Binance (@cz_binance) May 8, 2019
Meanwhile, in response to this news, the crypto market took a drop as Bitcoin tumbled to $5,650 from $5,890 only to get back up as it trades at $5,827.
Some only have a @Binance account for trading crypto assets. Not being able to deposit funds to Binance could create an artificially limited supply for some assets which can lead to price distortion & lower trading volume. Be careful.#opinion#crypto #cryptocurrencies
— C3|Nik (@C3_Nik) May 8, 2019
Altcoins are also in the red with BNB down 5.81 percent, as per Coinmarketcap data that has the total market at $185 billion, losing $3 billion from yesterday.