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Cryptocurrency

Binance Hack, CZ Suggest Blockchain Reorganization: Is another Bitcoin Fork Imminent? No.

Binance is hacked.

Exchange of the Maverick CZ, CEO of Binance announced via a blog post titled “Binance Security Breach Update” that it had been a victim of a cyber attack which saw the exchange losing about 7000 btc worth about $40million at current market price.

The hack which Binance described was through a large number of users API Keys, 2FA Codes and other information collected by the Hackers which they employed via phishing, viruses etc.

The hack which Binance described was through a large number of users API Keys, 2FA Codes and other information collected by the Hackers which they employed via phishing, viruses etc.

The attack was said to be well orchestrated and patiently executed through several accounts. However, the advanced risk management put in place by the exchange which has in time past foiled various cyber attacks on the exchange, the hackers were able to outsmart it thereby carting away with over $40million worth of Bitcoin.

Binance has said it will cover the stolen bitcoin through its #SAFU Fund, CZ still mentioned it via a twitter live stream AMA which ended over 7 hours ago. In the AMA CZ also brought up the issue of Bitcoin Reorganization.

.Reacting to the issue of reorganization, Crypto enthusiast started voicing their concerns over the idea of reorganizing the Bitcoin Network.

Crypto Proponent, Michael Novogratz of Galaxy Capital expressed his shock via Twitter by the Binance CEO even entertaining such thoughts.

Bitcoin Hard Fork Imminent?

From the comments on the Twitter thread, it appears crypto enthusiast are concerned about rolling back the bitcoin blockchain. It shows two sides to the issue at hand.

It should be noted the cause of major forking in the history of cryptocurrencies has been because of inability to achieve consensus. BTC/BCH Fork, Ethereum Fork, Monero fork, BCH/BSV Fork etc. A hard fork normally produces two or more Blockchain Networks.

The reorganization of the Bitcoin Blockchain will set that the hacked bitcoin becomes worthless thereby protecting every good network participants.Expressing support for the Top exchange, Justin Sun, CEO of TRON announced a 7000btc worth of USDT transfer into Binance if CZ agrees.

Other exchanges also drummed support for Binance by pledging to block deposits emanating from the addresses used by the hackers.

To this CZ appreciated and also made Justin Sun to know there is no need as all funds are covered with the Binance SAFU Fund.However, after announcing intent of Blockchain reorganization, CZ, CEO of Binance posted via Twitter that he has decided not to pursue the reorganization.

This decision he said was reached after speaking with various parties after considering the pros and cons of the decision which were:

Pro: 1. we could “revenge” the hackers by “moving” the fees to miners. 2. deter future hacking attempts in the process. 3. explore the possibility of how bitcoin network would deal with situations like these.

He went further to comment on the Cons.

Cons: 1. we may damage the credibility of BTC. 2. we may cause a split in both the bitcoin network and community. Both of these damages seems to out-weigh $40m revenge. 3. the hackers did demonstrate certain weak points in our design and user confusion, that was not obvious before. 4. While it is a very expensive lesson for us, it is nevertheless a lesson. it was our responsibility to safe guard user funds. we should own up it. We will learn to improve. As always, thank you for your support.

Though the transparent CEO came forward with his reasons for abandoning the idea of reorganization of the Bitcoin blockchain, some members of the cryptocurrency community are concern WHY the thought of reorganization was even brought up and that may seek to affect CZ reputation.

At current, your funds are #SAFU but is Binance and CZ #SAFU?

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