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Should crypto exchanges undo hacks?
Reuters/Darrin Zammit Lupi
Funds are SAFU.
PRIVATE KEY

Bitcoin can turn back the clock to undo catastrophic hacks—but should it?

Member exclusive by Matthew De Silva

Hackers stole more than $40 million of bitcoin from Binance, a popular cryptocurrency exchange, the company said Tuesday. The burglars “used a variety of techniques, including phishing, viruses and other attacks” to pilfer 7,000 bitcoins. Each coin currently trades for $5,900.

Binance promised to cover the losses using an emergency reserve, its Secure Asset Fund for Users, commonly referred to as “SAFU,” and the exchange is conducting a one-week review of its security standards. In the meantime, the exchange has disabled deposits and withdrawals, but trading itself will continue. “We beg for your understanding in this difficult situation,” Changpeng Zhao, Binance’s CEO, wrote in a blog post.

Massive heists are common in the digital currency universe, but Binance’s initial reaction to the theft was to consider a novel solution, which drew condemnation from many in the crypto community. At the suggestion of developers, including Jeremy Rubin, a programmer who has contributed to bitcoin’s open-source development, Binance briefly considered asking bitcoin miners—the people who confirm the network’s transactions—to roll back the theft.

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