The Binance 7000 BTC Hack Timeline: as it happened

08 May, 2019
by Jelmer van der Dussen
The Binance 7000 BTC Hack Timeline: as it happened

On Tuesday May 7 2019, Binance has been hacked. Hackers were able to take more than 7000 BTC (about $40 million at the time of writing) from different user wallets on Binance. This is the timeline detailing the events and when they happened.

'Service Maintenance'
It all started with an announcement of Binance CEO Changpeng Zhao. About two hours after the hack took place the community wasn't aware of the event yet, and CZ took to Twitter to say that Binance has 'to perform some unscheduled server maintenance that will impact deposits and withdrawals for a couple hours. No need to FUD. Funds are #safu.' CZ added that 'trading will not be impacted'.

The update from the Binance CEO sounded harmless, especially because of his statement that 'funds are safu', and not many thought there was a hack behind it. Except for one Twitter user, who immediately pointed CZ at a suspicious transaction. 'Got anything to do with the 7000 BTC that left the hotwallet in one transaction?' Later this turned out to be the transaction that contained the stolen funds.

The hack
Four hours later, Binance published a statement revealing the hack. The most important details: the theft took place on Tuesday May 7, 5.15PM UTC, and more than 7000 BTC was taken from user wallets by comprimising multiple user accounts through phishing and viruses and managing to get the funds out of the exchange without alarming the Binance security system before the withdrawals were excecuted.

'The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.'

'Not the best of days'
Binance CEO CZ reacted to the hack right after the statement came out, saying that this is 'not the best of days. But we will stay transparant. Thank you for your support!'

Users compensated, deposits and withdrawals suspended
Binance soon after announced that the users that are affected will be compensated by the SAFU fund, a fund that is created to compensate victums in case of hacks. While Binance is investigating the matter, withdrawals and deposits will be suspended. This will take around a week. Trading will continue in the meantime.

Industry wants to help with donations
Soon after the Binance hack announcement, exchanges started working together to block any deposits coming from the hacked wallets. Others tried to help Binance out by making a donation. TRON Founder Justin Sun took the opportunity to get some attention for his projects TRON and BitTorrent, by pledging a $40 million donation in USDT to be traded to BTC, BNB, TRX and BTT on the Binance exchange. CZ refused this and all other donations, stating that Binance has enough funds to cover the damages itself.

Binance AMA: re-org of the Bitcoin network possible
Shortly after the hack Binance CEO CZ took to Twitter for an AMA with the community. During this AMA, CZ revealed Binance was considering a Bitcoin re-org, meaning a rollback of the Bitcoin network. 'To be honest, we can actually do this in the next few days.' CZ said he was aware of the possible negative consequences of a Bitcoin re-org, such as damaging the credibility of Bitcoin, but nevertheless he was going to seriously discuss this with his team anyway.

Community turns against re-org plans
This comment from CZ led to a lot of negative reactions in the community. If Binance was going to get miners to do a rollback of the Bitcoin network because of this hack, is Bitcoin still really decentralized and immutable? And would any miner even agree with such a risky call?

NO Bitcoin re-org coming
Only hours after pushing the Bitcoin re-org idea, CZ came out with a tweet in which he announced that Binance will not do a Bitcoin re-org. The Binance team had discussed the idea with miners such as Jihan Wu, who advised against it. According to CZ, a re-org would damage the credibility of Bitcoin and would potentially cause a split in the network and community.

Hackers are moving around stolen Bitcoins
According to a team of researchers at the blockchain services company Coinfirm, the Binance hackers have been moving around their stolen Bitcoins, in an attempt to make it more and more difficult to track.

John McAfee offers his services to CZ

Cyber security veteran John McAfee reached out to CZ over twitter to offer any help he could. Later, CZ responded, saying he would love to pick McAfee's brain.

Most important takes
- Binance has been hacked for 7000 BTC
- Affected users will be compensated with funds from the Binance SAFU fund
- Binance has suspended withdrawals and deposits for about a week
- Trading will resume in the meantime
- There is no re-org coming on the Bitcoin network

This timeline will be updated with new events when they occur.

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