The Binance Hacking Incident
If you read the cryptocurrency news daily, you’ve probably heard about the Binance hack. There was an entire fuss over the social media and everyone went nuts about it. It wasn’t the fact that people lose money, because Binance will refund any affected user based on the SAFU fund. It was more than this. The Binance CEO, Changpeng Zhao, proposed a “reorg” – without knowing too many factors about it.
Its pretty much normal, you don’t know the technical stuff but you know its possible – you consider it. Let’s not forget how Ethereum split into two blockchains : the DAO hack. But when this happen on Bitcoin, a lot of people started to judge Changpeng Zhao’s actions.
I am shocked that @cz_binance even went there. Talk of forking or reorganizing the blockchain is close to heresy. When the ethereum community did it the project was like 5 months old. A baby. Bitcoin now has $100bn market cap and is a legitimate store of wealth. https://t.co/pXSqiUcq0i
— Michael Novogratz (@novogratz) May 8, 2019
Andreas M Antonopoulos lashes out at Binance CEO to even considering bitcoin reorg as an option. #binance #bitcoin #btc #binancehacked #crypto #bnb pic.twitter.com/eH5rzAfjk5
— BloqWire (@bloqwire) May 9, 2019
These are just an example, the crypto twitter was full of people attacking CZ’s actions. But one thing that people should understand is that – they would probably consider the same if they’d be in his position. A big amount of funds were lost. Were not lost by sending it to an address that makes them unspendable – but were lost to a third party which hacked the exchange. That’s not a nice feeling for a crypto business, but its a risk that you need to take.
The hack was painful.
The idea or a reorg was also painful.
But none of it was as painful as the shitshow that happen next.
The OKEx Maneuver & The worse crypto exchange marketing
After the Binance hack, coincidentally, OKEx started a promotion where a user would receive 10 USDT if he would deposit $100 from a ”compromised exchange”.
Switch to OKEx and Get 10 USDT by:
1. Registering an OKEx account
2. Depositing a minimum of 100 $USDT from the compromised exchange
TCs apply: https://t.co/HLdQ9EM50Y#airdrop #blockchain #bitcoin pic.twitter.com/uGIqtYDXdd
— OKEx (@OKEx) May 8, 2019
We get it. Aggresive marketing works for branding. Let’s not forget about the past Coca Cola vs Pepsi ads – marvelous from the marketing point of view. But this?
I would describe this as a desperate move from an exchange trying to lure investors. Instead of a solid marketing campaign with rewards – they chose to basically ‘steal’ customers from an exchange that was hacked. Moreover, it could be translated this as a message for the hackers: thanks for doing this, come to us and you may withdraw your FIAT now.
Yes, I know. They mentioned that they wouldn’t do this as they will always “require our users to complete KYC verifications and introduce new security measures.” – to quote Andy Cheung, OKEx Head of Operations and Ferrari fan. But does the message doesn’t welcome hackers too? Basically, the stolen funds are from a compromised exchange – so what’s stopping hackers from doing a KYC on the OKEx and use them? Especially with this ‘kind’ invite.
This is probably the worst crypto exchange marketing. And it would be even worse if they’d get hacked too – as the crypto world would probably remind them of this.
Copying what your competitors do and do it better or just do – is acceptable. No one can probably stop you from doing this.
Going after your competitor’s clients when they are bleeding by using such a marketing maneuver? This shows us that only care about one thing: money. And that they’re greedy enough to do this when their biggest competitors got hacked. At least have a sign of decency, OKEx.
The bad part? As good as this sounds in someone’s head – people cannot withdraw their cryptocurrency from Binance, yet. And probably they won’t. Why? Because this was a move that showed a lack of class, respect and ethics.
And we’re dissapointed because a top 5 exchange really done this.
Protecting Against a Crypto Hack – How It Should Be Done
The hack of a cryptocurrency hack has become less and less possible. Even with all the security measures – the fact that somewhere there are a few millions just waiting to get stolen is getting the attention of a lot of powerful minds. Minds that work carefully to achieve their goal: hacking a wallet and getting rich.
And the community is the problem here. OKEx proven that instead of being helpful and assuring the cryptocurrency world that the hackers can’t exchange the funds on their plaltform – they basically launched an unofficial invite for them. And that’s an issue.
Exchanges should work together in a case like this. Each exchange should be careful about big deposits coming and to do a proper KYC and the verification of the funds beforehand. If all the top 100 exchanges would do this, hackers wouldn’t have such a wide opportunity to exchange the stolen funds and will basically remain millionaires on the paper – with the funds stuck in a wallet. In this time, some people would work to find their identity. And if people would work like this – in a connected manner – the cryptocurrency hacks would happen less and less.
Because the harder would be to convert stolen crypto to FIAT, the smaller would be the amount of hackers that would try to achieve something like this. The fact that they might get caught and might go to jail because of this when they’d try to exchange the funds will make them go to risky places to trade such a big amount of money – such as localbitcoins or other similar services, where scams can happen.
If this incident taught me personally something, is that crypto is a heartless industry. When I first heard about the telegram scams, I was dissapointed by this community. But then I remembered how many Nigerian princes contacted me to send my $8 Million in cash. And that made me understood that where are money, there would be people trying to get them fast – by scamming or stealing.
But I never thought this would be done on a business level type. Instead of being helpful & showing support – OKEx show that they only care about the money coming trough them and that they lack any business ethics.
Changpeng’s Zhao proposal was bad. But he’s probably not such a technical person on all features that bitcoin have – and as any business owner – he wanted the funds recovered. If you probably ask him about Binance or Binance Chain – he would probably answer all of your questions. Because that where his expertise is: being the CEO of Binance. Perhaps, you’d get a laughable response if you’d ask Vitalik Buterin a question about biology and chemistry. Why? Because its not his area of expertise. Each of us have stuff that we know and we know it good and stuff where we don’t know nothing at all.
What was worse? OKEx’s method to attract new customers. A desperate, failed attempt to gain a bit of attention. And they probably got it. But would you trust them after this? I don’t.
Disclaimer: This post was written by Andrew, a marketing manager with over 5 years of experience and a believer that cryptocurrency is here for more than quick get rich schemes. A believer that the cryptocurrency space is here to help us have a better financial freedom.
Image Source: Cryptolinenews