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Binance Hack Update: CZ decides not to reorg Bitcoin network as cons outweigh the pros

Security

ambcrypto.com 08 May 2019 11:00, UTC
  
Reading time: ~2 m

After Binance announced that they had been hacked, costing them 7,000 BTCs, CZ announced in his AMA that they were considering reorging the Bitcoin network, which would allow them to recover the stolen funds.

However, in a recent update on Twitter, CZ announced that he will not be going forward with that decision. He tweeted,

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

— CZ Binance (@cz_binance) May 8, 2019

The concept of reorging the network to recover funds was suggested by Jeremy Rubin. He tweeted,

@cz_binance if you reveal your private keys for the hacked coins (or a subset of them) you can decentralized-ly at zero cost to you, coordinate a reorg to undo the theft.

— Jeremy Rubin (@JeremyRubin) May 8, 2019

Although CZ could get “revenge” on the hackers by reorging the Bitcoin network and “moving” the fees to miners and deter future hacking attempts, he chose not to. He explained his decision by stating that the cons outweigh the pros.

CZ tweeted,

“cons: 1 we may damage credibility of BTC, 2 we may cause a split in both the bitcoin network and community. Both of these damages seems to out-weight $40m revenge. 3 the hackers did demonstrate certain weak points in our design and user confusion, that was not obvious before.”

He added that this hack was a very expensive lesson for Binance and that it was their responsibility to safeguard users’ funds. CZ said that they “should own up to it” and that they “will learn and improve.”


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