Evidently, the recent security compromise that affected crypto exchange giant Binance has done little to dampen optimism for the trading venue’s digital currency, Binance Coin (BNB). Almost the entire crypto market has gone parabolic in the kind of fashion not seen since the days of the 2017 bull market but BNB leads the way in terms of 24-hour price increases.
The price of the tokens issued by the exchange initially fell following the announcement of the hack last week. However, following a series of open announcements from Binance, the exchange’s coin is surging back from its brief decline.
How Did Binance Shrug off a $41 million Crypto Hack?
As one of the few crypto exchanges to have issued its own digital currency, observers have a unique insight into public sentiment regarding Binance following its recent costly hack. The security compromise last week saw 7,000 Bitcoin taken in a heist that is reportedly the sixth largest in the history of Bitcoin.
Following such a potentially catastrophic security breach, it would be easy for digital currency traders using Binance’s services to turn their backs on the company, and by extension, its token. However, judging by the current price performance of BNB, there has been no such continued dumping of the crypto asset – quite the opposite in fact.
As mentioned, the exchange’s own crypto is currently leading the last round of price increases. Whilst the majority of the top ten digital currencies are up over the last 24-hours at the time of writing, Binance Coin, according to Coinmarketcap, is up the most at over 16 percent. This compares to Bitcoin’s 12 percent, Ethereum’s more than 7 percent, and Litecoin’s 5 percent.
A lot of the current price performance by Binance Coin is likely down to how open and transparent the Binance team appear to have been regarding the exchange hack. Just days after the breach was first discovered, Changpeng “CZ” Zhao, the trading venue’s CEO and founder, held an Ask-Me-Anything session to try to put customers minds at ease.
The exchange’s staff were even open about their discussions regarding a potential blockchain reorg that would return the stolen Bitcoin. This, understandably, was quickly shot down by many loud voices in the crypto space before eventually being dismissed by CZ too.
The exchange has also kept users updated with fresh information regarding the hack as it becomes available. This has taken the form of a series of blog posts, the latest of which, published yesterday, states that deposits and withdrawals should come back online tomorrow. The exchange is hoping to resume business as usual following necessary downtime in the immediate aftermath of the hack. CZ states in the post:
“Our team is making progress and has been working through the weekend. In the past few days, we have made some significant overhauls to our system, with a large number of advanced security features added and/or completely re-architected. We will share details on some of the changes later.”
— Binance (@binance) May 12, 2019
Another fact that differentiates the Binance hack from the many previous examples of such security compromises at crypto exchanges is the fact that this time the affected company had the capital on hand to pay back those impacted by the breach. The firm had been putting away a percentage of its monthly profits in the amusingly named SAFU Fund – the Secure Asset Fund for Users. In fact, Binance did not even take up the many offers of financial help it received following the hack. CZ stated at the time:
“We are hurt but not broke.”
The overall handling of the situation by CZ and the Binance team is likely why such a potentially catastrophic hack has not resulted in a mass exodus from the trading venue and, by extension, the Binance Coin. Not many others in the crypto space could have shrugged off a $41 million breach so casually.
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