Funds Are SAFU, but Reorg Is Not: What We Know About the Binance Hack So Far

Binance has announced that it will use its reserves "To cover this incident in full," hence "No user funds will be affected."

According to the Binance CEO, a number of crypto exchanges, including KuCoin and Coinbase, are collaborating with Binance to block deposits from the hacked addresses.

Coinfirm May 8, 2019 Then, cryptocurrency news outlet The Block reported that the funds from the aforementioned 44 addresses have allegedly been moved to seven addresses, six of which hold 1,060.6 BTC, while one holds 707.1 BTC.Funds are SAFU: Binance says it will completely cover the loss using its reservesBinance has stated that all losses will be covered by its emergency insurance fund.

Dubbed "Secure asset fund for users," it was announced last year as an initiative to "Offer protection to users and their funds in extreme cases." According to Binance, 10% of all trading fees have been being sent to a separate cold wallet starting from July 14, 2018.

Notably, Tron founder and CEO Justin Sun has offered to deposit 40 million tether to Binance in exchange for binance coin, BTC, TRX and bittorent coin.

The proposition has drawn criticism from some Twitter crypto community members, who suggested that the TRX founder was essentially offering a marketing ploy by proposing to buy the coins "He already has a vested interest in." Zhao has declined Sun's offer, explaining that Binance has enough funds to cover the loss.

When asked about this, a Binance spokesperson explained to Cointelegraph that "Transactions to wallets can still occur but won't be reflected on Binance until our security review is complete."

As proposed by Bitcoin Core contributor Jeremy Rubin, such an approach could have involved Binance essentially conferring retroactive ownership of the hacked bitcoin to the blockchain's miners by revealing the exchange's private keys for the affected coins, or even ostensibly 'sign[ing] batches of txns with the old utxos paying miners with different locktimes to make it a permanent reward to unwind this hack.

As the exchange's CEO explained, even though the move could allow Binance to take "revenge" on the hackers and move the stolen funds back, the credibility of BTC could be damaged as a result.

Reorg is not an entirely new concept; similar suggestions were made back in 2016, when Bitfinex was hacked for 120,000 BTC.The Binance hack marks the largest security breach of 2019 so far - even though Coinbene is reported to have lost $100 million, it has yet to officially confirm it.