“F***, F***, F***,” Binance CEO Candidly Recalls Recent $40 Million Hack Nightmare

“F***, F***, F***,” Binance CEO Candidly Recalls Recent $40 Million Hack Nightmare

TL;DR: “After 10 seconds of the ‘F***, F***, F***’ state,” Binance CEO Changpeng Zhao (CZ) posted to the exchange’s blog, “I did a quick mental calculation. 7000 BTC, fine, I know we have more than that in our own BTC funds alone. There is enough.” It’s a rare, candid look inside what had to be sheer terror at the realization his company was just hacked for $40 million.   

Binance CEO Candidly Recalls Recent $40 Million Hack Nightmare

The basic facts are out there: hackers were able to siphon 7,000 bitcoin core (BTC), worth $40 million, from one of the world’s most popular cryptocurrency exchanges. Binance was known for is #safu, inside-baseball lingo signalling users’ funds were considered unusually safe by crypto standards. Such was not the case.

“F***, F***, F***,” Binance CEO Candidly Recalls Recent $40 Million Hack Nightmare

“While things are crystal clear in hindsight,” CZ admits, “at that moment, we weren’t 100% sure as to what exactly happened. Was it an actual user action, a glitch in the system, or maybe a hack? As we were still evaluating the situation at the time, we decided to proceed with caution.” He also phrases his tweet about “unscheduled maintenance mode” in the moments immediately after as something less than truthful … to buy time.

In corporate blog posts, of course, it’s par for the course a company claims transparency while often being anything but. They’re always doggedly doing good, maybe at fault but not malicious enough for anyone to worry going forward. For sure, there’s much of that here in CZ’s recounting of events, but there’s also a tad more.

Binance CEO Candidly Recalls Recent $40 Million Hack Nightmare

The tension is for outside observers: business security found vulnerable is a wakeup call, but insisting all is well and will be well, only time proves that. It could be hackers are simply biding time once again, under Binance’s nose, undetected.

CZ’s looking back at what would be widely panned as a public relations disaster, a previously scheduled Ask Me Anything on Twitter just hours after the hack, is an interesting take. He seems to believe it was all ultimately positive. “Seeing me live did put a lot of our community at ease,” he congratulated himself. “The livestream was analyzed to death, including body language analysis which I thought was a very good thing.” He urged other leaders within the industry to do the same, “Get on a live video stream during a crisis. Your users deserve to know, not just what happened, but how you are doing and handling it, including allowing them to judge your mental state for themselves.”

It was during that AMA the CEO suggested a rollback of the BTC chain, a reorg, combined with payouts to miners, in an effort to recover stolen funds. That part of the AMA, CZ labels as one of the time period’s distractions. “The discussion was already pretty hot on Twitter, so I mentioned it in the AMA as something that was suggested. Little did I know, it was a taboo topic. Lesson learned,” Zhao insisted.

I am Not Gonna Deny it. My First Reaction Was: “F***!”

CZ is most candid when he delves into his mental state. “I am not gonna deny it. My first reaction was: “F***!”, the second and third reactions were also the same,” he stressed. He uses that line as a way to laud his team, which he also described as being ahead of his emotions, attempting to right the ship.

“F***, F***, F***,” Binance CEO Candidly Recalls Recent $40 Million Hack Nightmare

He tells of early decisions the exchange made to assist Chinese customers back in 2017 who lost money after the government banned ICOs. According to Zhao, Binance dedicated a significant portion of its cash on hand to cover losses and enable some of the token projects to rebound. “The goodwill that decision generated eventually brought us many users from China and all over the world and helped to fuel our growth,” he noted. This time around, of course, stakes were considerably higher, but the principle was to be the same.

“We thus announced that we would cover the entire loss in full,” he again congratulated his company. That’s an interesting line, and perhaps there’s a lot of truth to users having already signed away their right to protest losses of funds in such a fashion through terms of service agreements. How the problem, hack, breach is sliced, Binance covering the stolen funds perhaps should never have been a question.

DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH. 

“F***, F***, F***,” Binance CEO Candidly Recalls Recent $40 Million Hack NightmareCONTINUE THE SPICE and check out our piping hot VIDEOS. Our podcast, The CoinSpice Podcast, has amazing guests. Follow CoinSpice on Twitter. Join our Telegram feed to make sure you never miss a post. Drop some BCH at the merch shop — we’ve got some spicy shirts for men and women. Don’t forget to help spread the word about CoinSpice on social media.