Binance Moves Swiftly on API Exploits, Establishes SAFU Program
Binance is the exchange an emerging, blockchain-fueled cryptocurrency community has desperately needed. Yesterday (July 3rd) around 9:oopm EST, Binance suddenly shutdown withdrawals, trading and other account functions for “maintenance.” Shortly after, screenshots from Telegram groups begun surfacing on Binance tweets —what was going on with the exchange?
Binance’s trading API had been exploited as the team experienced irregular trades, specifically in the Syscoin markets. To be very clear — Syscoin blockchain was not hacked like circulating rumors indicate. Binance is making it very clear this was a problem with their own API and not Syscoin.
Before I continue, here is the official update from Binance:
Binance Responds Responsibly
Looking at the image above from the official release, Binance very outwardly displays that they are acting in the user’s best interest. Rolling back irregular trades, offering 0% trading fee for those who foolishly chases the Syscoin pump, giving back 70% of trading fees to all users and, last but certainly not least, establishing SAFU.
Establishing a Secure Asset Fund for Users, SAFU, is the type of reaction a leader in the space like Binance should exhibit. Remember Mt. Gox? That hack happened in 2011 where 850,000 BTC was lost and the event has plagued the markets even in 2018 as the legal case comes to a close. 7-years later.
By streamlining 10% of trading fees into SAFU, Binance will not only heavily mitigate the risk of the worst possible outcome in case of a future hack, but they will be building a reserve with 10% of fees that could very well have alternative uses.
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Prepare for the future and make healthy decisions:
Gotta love the response by Changpeng Zhao to not only ignore the validity of FUD-filled news, but to identify, reflect and to make a healthy decisions to quit following them if they are spreading FUD.
While Binance did not give notice about the unscheduled ‘System Maintenance,’ it is obvious they were working in their users’ best interest. Looking at the image above, it is also clear that users did not appreciate the unscheduled announcement; but, as we can see in the sentiment toward the follow-up announcement, users were okay with the actions considering the circumstances.
What Are Your Thoughts?
I have been covering Binance since December of 2017 in quite a few articles now — I can obviously be biased toward favoring the exchange, but do my best to stay objective. These types of actions are very ‘centralized,’ but the type of actions made to protect and prevent this from happening in the future.
Do you think Binance is in the right to rollback irregular trades?
Offer 70% trading fees back to users?
Offer 0% to those who foolishly chased the Syscoin pump?
Establish a SAFU program to mitigate the negative effect of a hack in the future?
Please leave your thoughts as a comment and below are some links more in-depth articles about Binance if you want to dig deeper:
- Binance Exchange: Fueling a Hot New Era of Token-based Exchange Models?
- Binance Coin: Creating Demand Through Innovative Utility-driven Features
- Binance Does It Again: Passes Deutsche Bank Quarterly Profits, Continues Leading With Token-based Exchange Model
Below are some resources for beginning cryptocurrency enthusiasts or others interested in something new:
- Changelly — the ultimate fiat-cryptocurrency exchange to buy/sell instantly with credit cards, for anybody, anywhere.
- HitBTC — great exchange for trading various cryptocurrencies and operational since 2013.
- Gate.io — Cryptocurrency exchange listing new coins — get 10% off trading fees if you register with this link.
- History of Cryptocurrency Exchanges — insightful look into the token-based exchange model and how exchanges have evolved.
- CoinPayments — Receive and make payment via 70+ different cryptocurrencies — the crypto-PayPal.
- CoinTracking — Your personal Profit / Loss Portfolio Monitor and Tax Tracker for all Digital Coins or cryptocurrency. Bitcoin, Ethereum, Litecoin, altcoins, etc.
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- CoinMama- purchase Bitcoin and Ethereum w/ credit/debit cards & using cash through WesternUnion on their platform. Best for Euro purchases.
- Cryptocurrency Resource Telegram Channel — Telegram channel dedicated to providing beginners or experienced cryptocurrency traders with alternative resource options. Exchanges, hardware wallets, tax resources, etc.
- Ledger Nano S — multi-cryptocurrency cold hardware wallet supporting Bitcoin forks. Keep your coins safe and offline. Cold storage.
- Kucoin Exchange — Binance’s ‘little brother.’ Very similar with trading competitions and whatnot. Revenue share token as well!
- Binance — the up-and-coming cryptocurrency exchange that has truly entered as a leader among exchanges.
- InvestFeed — Follow along on InvestFeed to get the best cryptocurrency project news. The go-to social platform for crypto enthusiasts.
- CoinMate — great Bitcoin Exchange for those who reside in Europe, the EU and surrounding area. Very easy to understand.
- Huobi Exchange — newer Asian-based exchange, many new tokens.
