Cryptocurrency and Blockchain tech became hugely popular because of the many features they were packed with which differentiated them from traditional markets. One such claim was advanced and sophisticated security, which seems to be falling.
Binance Exchange, the world’s biggest and safest crypto exchange was hacked on Tuesday evening, which resulted in a loss of over 7000 BTC, valued around $40 million. While the exchange informed that it had enough funds in reserve to wholly compensate users affected, the concerns this time are far beyond that.
Crypto exchanges have been under attack for the last couple of years. In early 2018, Japanese Digital exchange, Coincheck was breached, as it lost over a staggering $517 million in the single attack to hackers. Many such big and small attacks have been executed in the last few months, which has resulted in losses of hundreds of millions of dollars. However, one last warrior who kept fighting the battle was Binance, which was credited to be the epitome of blockchain and crypto security.
Nonetheless, the warrior seems to be finally pinned down, as an attack on Binance was finally executed. This is quite a ground-shattering incident, simply because of the sheer influence, Binance has on the crypto space. What it does is compels users to rethink their stand on cryptocurrencies, and make skeptics and critics like Warren Buffett win.
Such incidents also motivate other hackers to take down other more vulnerable platforms. It’s simple if you beat the Commander, which happens to be Binance in this case, you beat the army. Therefore, one wonders whether the promises the crypto market makes, are they too good to be true? Is the whole “Crypto Keeps My Money Safe” philosophy just one of the many illusions which general investors fall for?
Ironically, just days ago, Binance entered in a partnership with a blockchain analytics start-up to boost its security.
Security first. Fighting hackers / scammers / fraudsters is not easy. https://t.co/Bm0FVXt98x
— CZ Binance (@cz_binance) May 2, 2019
This shows that there isn’t any lack of intent on the part of the exchange. It’s just that the efforts were just not enough. And if efforts by a company as big as Binance are not enough, then they’d never be.
Legendary finance expert and the Master of Investments, Warren Buffett recently lashed Bitcoin for being useless and compared it with a button of his suit, which has very limited use. One other thing Buffett stated, which is worth noting is that cryptocurrencies are not secure and have too many frauds, which, though hurting, seems to be true.
Nonetheless, the only positive thing coming out of the whole incident is the unity among the crypto space. TRON CEO, Justin Sun offered to deposit the entire 7000 BTC by his own on the platform. However, Changpeng Zhao, Binance CEO, declined the proposal politely.
Thanks for the support, really appreciate it. But currently no need. We will cover the loss from the #SAFU fund, there is enough. We are hurt, but not broke.
We are working hard to resolve the issue, so that everyone can deposit and withdrawal again. Will take some time. https://t.co/0j4J0fk99W
— CZ Binance (@cz_binance) May 8, 2019
Also, Zhao also thanked the crypto community for coming together. He confirmed that he had discussed the issue with various exchanges and wallets to block the deposits of BTC from the hacked addresses, to which all of them have agreed.
Also thanks to @coinbase and many other exchanges (again, can't list everyone) pledging to block deposits from those addresses. Much appreciated!
Also much appreciate the "unitedness" of our industry to fight hackers and fraud.
— CZ Binance (@cz_binance) May 8, 2019
Sure, CZ believes that they can refund the tokens to users to minimize losses. Sure, the crypto space is coming together. But is that a permanent solution? It definitely isn’t, and from what one can make out of the current situation is that the crypto space reacts wonderfully to any cybercrime, but it just cannot be proactive with hackers.
Binance had been the only major platform that wasn’t hacked, and sadly, that feat no longer belongs to anyone.