Post-hack, Binance founder puts foot in mouth

Chris Dannen

By Chris Dannen

After announcing that "unexpected maintenance" downtime was actually owed to a $40M hack, Binance Founder Chanpeng Zhao quickly took to Twitter to discuss the possibility of paying Bitcoin miners to reorganize the chain and reverse the transaction. Not only would such an effort be utterly infeasible and uneconomical, it would also be tantamount to a hostile attack. Fortunately, even hypothetical mining pool operators are too rational to go along with such a scheme. Binance's security checks may not be working, but Bitcoin's incentives are. (Iterative Capital Management and its subsidiaries trade on Binance, but lost no funds.)  

Binance CEO Spurs Outcry by Suggesting Blockchain Rollback

"The chief executive officer of one of the world’s largest cryptocurrency exchanges said -- in a video as well as several tweets -- that he considered making a push to rewrite a chunk of the digital ledger than underpins Bitcoin to invalidate the overnight theft of about $40 million of the digital coins. To do that, Zhao would consider asking so-called miners, whose computers verify and record transactions in the distributed ledger, to reverse the hacker’s transaction and to take the $40 million for themselves. Ultimately, Zhao said he decided against the idea. 'Talk of forking or reorganizing the blockchain is close to heresy,' Michael Novogratz, the billionaire founder and head of crypto company Galaxy Investment Partners LLC, tweeted."

Other News

Bitcoin Breaks Above $6,000 Level for First Time Since November

"Bitcoin’s nine-weekday winning streak is the longest since May 2017. It shrugged off a brief sell-off Wednesday after Binance, one of the largest cryptocurrency exchanges in the world, said hackers withdrew 7,000 Bitcoins worth about $40 million at the time. ... 'Bitcoin’s long-term technical profiles continue to point to a new up cycle,' said Fundstrat Global Advisors LLC technical strategist Rob Sluymer in a note May 8. He reckons the digital asset is continuing to rebound from support at its 200-week moving average, after telling investors last week to buy."

Quantifying Immutability

"One of the most important things we want to do with Finney Ratio, Szabo Score and Immutability Maps is to help stakeholders visualize immutability in blockchains and how it gets affected over time. Being able to do this in a coherent manner that helps people understand the implications of blockchain immutability allows us to decide what aspects of immutability are important to a community’s values. For example, a break in SHA-256 and an upgrade to SHA-3 violates the Hashing Algorithm category of immutability but improves security. Moving from Proof-of-Work to Proof-of-Stake violates Consensus Mechanism of immutability but improves scalability in the long term. Adding new op-codes violates Reserved State Space but extends blockchain functionality over the long run. The whole point is to understand that immutability is about tradeoffs, and each blockchain community would then need to decide which tradeoffs are worth pursuing."

Facebook rolls back ban on cryptocurrency ads as it ramps up its own blockchain efforts

"'We've listened to feedback and assessed the policy's effectiveness,' Facebook said Wednesday in a blog post. 'While we will still require people to apply to run ads promoting cryptocurrency, starting today, we will narrow this policy to no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency.'"

‘A Loan Shark Situation’: MakerDAO Is Leaving Crypto Borrowers With Rising Bills

"In fact, the cost of borrowing on MakerDAO has risen rapidly recently and this has been especially painful for those who took out loans in order to make consumer purchases (rather than to make leveraged crypto investments). Since early February, the cost of the fees associated with these loans has gone from an annual rate of 0.5 percent to 19.5 percent as of this writing. It might not be done rising either. Less discussed is how that affects everyone using the platform, as rates on loans originated at the lower rate rise when the protocol’s fees are adjusted (a process controlled by the owners of another token, MKR)."

Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies

"The Financial Crimes Enforcement Network (FinCEN) is issuing this interpretive guidance to remind persons subject to the Bank Secrecy Act (BSA) how FinCEN regulations relating to money services businesses (MSBs) apply to certain business models involving money transmission denominated in value that substitutes for currency, specifically, convertible virtual currencies (CVCs). This guidance does not establish any new regulatory expectations or requirements. Rather, it consolidates current FinCEN regulations, and related administrative rulings and guidance issued since 2011, and then applies these rules and interpretations to other common business models involving CVC engaging in the same underlying patterns of activity."

New Financial Apps Aim to Protect the Elderly

"Yet, there is a market need. The Consumer Financial Protection Bureau estimates that in 2017 seniors experienced 3.5 million incidents of financial exploitation, including fraud perpetrated by strangers or theft by caregivers and family members. Adults ages 70 to 79 are estimated to have lost an average of $43,300 in each reported case of financial abuse. Most fintech tools for older people are targeted at their adult children. Many in the so-called 'caregiver generation,' those caring for parents as well as their own children, are already familiar with online banking tools and are willing to try new services that might save them time."

Op Ed: How Many Wrongs Make a Wright?

"Over the years, I had assumed that Wright would discredit himself to the point that we no longer had to hear about him, but he has persisted. Most recently he has taken to legally threatening people who publicly proclaim that Wright is not Satoshi. But I posit that Satoshi Nakamoto no longer has any power over Bitcoin — the question of Satoshi’s true identity is but an irrelevant curiosity. I believe the relevant question is whether or not Wright is credible: After considering the evidence presented in this post, you can make a better-informed decision. The following represents much of the relevant information about Wright’s history with Bitcoin and its community that I could find, compiled into a format that will hopefully make for an easy reference."