Proof of Work: Binance gets hacked

Bitcoin • May 9, 2019, 2:31PM EDT
The Block

Quick Take

  • Binance, one of the largest crypto exchanges by volume, suffered a massive hack this week
  • The hack was the sixth-largest in crypto history, with around 7,000 bitcoins ($41 million) stolen
  • The exchange has said its SAFU insurance fund will cover its losses and that user funds won’t be affected
The following newsletter is republished with permission from Eric Meltzer of Primitive Ventures, a global venture investment firm with a focus on blockchain and related technologies. You can follow Eric on Twitter at @wheatpond and subscribe here to Proof of Work.

Binance suffered a hack this week, the specifics of which remain unclear. Some combination of multiple techniques allowed the hacker(s) to send themselves a single giant transaction of >7,000 BTC to an address under their control, from the Binance hot wallet. Binance announced that this would be 100% covered from their insurance fund, and that no user funds would be affected.

Jeremy Rubin, a BTC core dev and friend-of-the-newsletter had the following suggestion

 

You can replace “reveal the private keys” (which would allow miners to make their own transactions spending the hacker’s coins to miner addresses) with “create a double-spend of the hack transaction back to a Binance-controlled wallet, and add a massive fee—700 BTC? 7000 BTC?—to incent