Cryptocurrency market update: Cryptos rebound following 7,000 Bitcoin hack attack on Binance exchange

• Following the attack, CZ held an ask me anything (AMA) session via Periscope.
• Binance will not pursue the lost BTC but will instead rollback on the Bitcoin network to recover the funds.

The largest cryptocurrency exchange in the industry suffered a devastating hack attack where 7,000 Bitcoins were lost. The CEO of Binance Changpeng Zhao (aka CZ) released update hours after the attack saying that the company was not going to pursue the lost BTC that summed up to about $40 million. The decision came after consulting various industry leaders and instead it is going to rollback on the Bitcoin network to recover the lost funds.  

Binance attack was discovered at 17:15:24   UTC on May 7 after a transaction of Bitcoin with withdrawals emanating from several users accounts transferred 7,074 BTC from the platform.

Following the attack, CZ held an ask me anything (AMA) session via Periscope where he addressed questions regarding the hack.

“We’ve been working with other exchanges to block deposits from those hacked addresses.”

He added:

“[On] the other topic of ‘do we want to issue a rollback on the Bitcoin network’… Because right now, the 7,000 BTC is far higher than if we distribute that to miners. It would be far higher that what they got paid for the last few blocks. To be honest, we can actually do this probably within the next few days. But there are concerns if we do a rollback on Bitcoin network at that scale. It may have some negative consequences in terms of destroying credibility for Bitcoin. So, again, the team is still deciding that, and we’re running through the numbers and checking everything.”

A tweet from Zhao on May 8 reassured the crypto community:

“After speaking with various parties, including @JeremyRubin, @_prestwich, @bcmakes, @hasufl, @JihanWu and others, we decided NOT to pursue the re-org approach. Considerations being:”

The news of the attack caused instability in the price of the major coins, Bitcoin slumped to levels slightly below $5,700, Ethereum dipped below $170 while Ripple plunged back below $0.3000. However, the market has engaged reverse gears as green shoots start to sprout across the charts. BTC is up 1.06% on the day while Ethereum is up 0.35, and Ripple is up a subtle 0.05%. The rest of the market mostly in the green with some red spot here and there.