Binance, the cryptocurrency exchange that saw 7,000 BTC stolen in a hack last Tuesday, is set to reopen deposits and withdrawals tomorrow amid concerns that it could negatively affect a suddenly buoyant market. A week after the $41 million worth of crypto was stolen, security upgrades have almost been completed and anyone who made a killing during Bitcoin’s crazy weekend will be able to withdraw their funds… as long as they have the patience to get past whatever extra security measures Binance will have placed in the way.
Binance Ups the Ante
Binance has released an AMA and two further updates on the matter since details of the hack were first divulged. On Friday they revealed that they were using lessons learned from the hack to “significantly revamp some of our security measures, procedures, and practices”, particularly in the areas of API, 2FA, and withdrawal validation, which were areas the hackers reportedly targeted. This means that those wishing to use their API data and withdraw money in particular are likely to face more stringent processes.
Friday’s post also revealed the integration of hardware security devices, such as Yubico’s YubiKey, a USB 2FA device. A short update was posted Sunday which spoke of the “significant overhauls to our system, with a large number of advanced security features added and/or completely re-architected”, and with a further update promised once the platform goes live again which will explain the new features in more detail.
Market Braced for Negative Impact
The impact of Binance coming back online has already been debated in crypto communities, and is of particular interest given the price action over the weekend. It’s fair to say that the majority of those commenting were not positive about the development:
What impact on alts could Binance‘s reopen of deposits/withdrawals have?
As the „gap“ b/w BTC and Total MC has widened it would be logical alts to rise while BTC consolidates. pic.twitter.com/5OgwqQbAuW
— Strong Hands #HODL (@_think_man) May 11, 2019
Perfect timing, Tuesday, epic 50% dump signal sent and received
— Steve Levy (@Stevelevy18) May 12, 2019
Zhao Receives Praise for Response
Changpeng Zhao, Binance’s CEO, has received a great deal of praise for the way he has handled the hack and its aftermath, aside from the character assassination he received when he entertained the thought of a Bitcoin blockchain reorg, which he has since labeled a “dirty word”. Binance has long been one of the most open and communicative exchanges when it comes to keeping customers informed, which Zhao readily acknowledges in one of the security updates:
We will maintain constant communication with our community. I (CZ) am active on Twitter. In fact, some people even say I tweet too much. But my role is a facilitator and communicator. Honestly, I am not writing code or debugging servers. Given how much I talk, I sometimes say the wrong stuff, dirty words like “reorg”, for which I apologize. It is my strong view that our constant and transparent communication is what sets us apart from the “old way of doing things”, even and especially in tough times.
Zhao also states that the event has “further united an already tight team” and that the hack “will actually make us far stronger and more secure in the long run.” It will, but it’s a little alarming that it took something so severe as a $41 million hack to see that security could be improved. Hopefully, other exchanges take a look at what security measures Binance puts in place and will act accordingly.