Binance Offers $250,000 Bounty For Information Leading To Hackers’ Arrest

  • Binance is offering $250,000 for information that leads to the arrest of hackers who attacked it last week
  • The bounty will be paid in its BNB token, and may be split if multiple sources are used
  • Bounties aren't new to the bitcoin ecosystem. Currently available bounties include one for 37 BTC for information on hacker who hacked Satoshi Nakamoto

Hong Kong-based cryptocurrency exchange Binance is offering the equivalent of $250,000 for information that leads to the arrest of those responsible for an attack on its platform last week. The attack, as reported, was only stopped by the exchange’s security systems.

Last week Binance managed to thwart a ‘large scale’ theft attempt, in which it managed to withhold hackers’ funds. Now, the company decided to ‘play offense’ and offer a reward for information that leads to the criminals’ legal arrest.

The security incident saw hackers create API keys for phished users, so they could then pump Viacoin with the victims’ funds and sell the little-known cryptocurrency at a premium in the VIA/BTC trading pair. The irregular trading activity triggered Binance’s security systems, which halted withdrawals.

Binance’s $250,000 bounty will be paid in its Binance Coin (BNB), a token used at the exchange. Those who wish to collect the bounty will have to send the information they have to the exchange, and to their local law enforcement agencies. If local laws allow, the bounty hunters will be able to remain anonymous.

Justifying its move, Binance wrote on Medium:

“To ensure a safe crypto community, we can’t simply play defense. We need to actively prevent any instances of hacking before they occur, as well as follow through after-the-fact.”

Binance

The company noted that if multiple data segments lead to the final arrest, the bounty may be split at Binance’s discretion. To widen its effort, it further revealed it allocated the equivalent of $10,000,000 in cryptocurrency reserves for future bounty awards. The Hong Kong-based exchange’s blog post further reveals it invited other cryptocurrency exchanges and businesses to follow suit.

Notably, bounties are nothing new in the bitcoin community. BitcoinBountyHunter.com currently has several bounties going. The biggest one, for 37 BTC (about $370,000), is being offered for information on the hacker that breached bitcoin founder Satoshi Nakamoto’s email account, and claimed to send a SWAT team to bitcoin pioneer Hal Finney’s home.

Another 20 BTC (about $196,000) bounty is being offered for information on an extortionist who threatened the family of bitcoin angel investor Roger Ver. The website notably doesn’t encourage vigilantism, and reportedly only pays out bounties if the crime if reported to authorities.

How Bakkt Can Bring the Crypto Space an Institutional Investor Influx

Cryptocurrency enthusiasts have for years been waiting for institutional investors to enter the space. While the introduction of bitcoin futures contracts on regulated exchanges in late 2017 didn’t gain a lot of traction, but Bakkt may.

Bakkt is a long-awaited bitcoin futures exchange and on-boarding platform from the Intercontinental Exchange (ICE) - the parent company of the New York Stock Exchange – and it’s set to launch this year. Bakkt itself has remained tight-lipped over the precise launch date after delaying its launch last year, with ICE CEO Jeff Sprecher in February simply saying “later this year.”

It’s possible that this quarter may see the launch or at least more news about when the exchange is finally coming. At the end of March, Bakkt CEO Kelly Loeffler explained:

While we’re not yet able to provide a launch date, we’re making solid progress in bringing the first physical delivery price discovery contracts for bitcoin to the U.S.

Bakkt’s launch could be a major milestone for the cryptoasset industry. A venture backed by Microsoft and Starbucks, its institutional pedigree alone will switch many cautious investors on. Specifically, the firm is set to help consumers pay for goods and services with cryptocurrencies, with Starbucks being the flagship retailer in its arsenal.

Bakkt’s Bitcoin futures contracts will be the first physically-settled derivatives on a regulated trading platform. This means investors will receive the contract’s underlying asset, bitcoin, when it expires.

Currently the Chicago Mercantile Exchange (CME) offers cash-settled bitcoin futures contracts, meaning investors get the equivalent of BTC’s value in fiat when the contracts expire. This is seen by some as a major development in the cryptocurrency space, as it shows traditional finance is willing to interact with the nascent cryptoasset industry.

It’s worth noting that earlier this year the ICE’s CEO called Bakkt a “bit of a moonshot bet,”  as it was organized in a way “very different than the way ICE typically does business.” The firm has its own offices and management team, and could undergo more rounds of financing in the future.

Bakkt And a Potential Bitcoin ETF

What’s significant about Bakkt’s launch beyond this, is that it may bolster the chances of a Bitcoin Exchange-Traded fund (ETF) being approved. Such a product would make it easier for institutional investors to gain exposure to cryptocurrencies.

In August, the US Securities and Exchange Commission (SEC) rejected nine other ETF applications, in particular highlighting how those applying hadn’t provided evidence that “bitcoin futures markets are of significant size’” for an ETF to be launched.

Once Bakkt is launched its trading volumes may very well help quell the SEC’s concerns over the bitcoin futures markets’ small size as institutions and other investors may feel comfortable entering it. Larger futures contracts trading volume, increased liquidity and a well-established company involved may prove enough to convince the SEC that the time is right for a Bitcoin ETF.

Bakkt therefore represents a very significant milestone for a maturing cryptoasset industry and may well herald the “institutional influx” that many have been anticipating since 2017. Despite the markets remaining relatively flat throughout 2019 these looming decisions in the U.S. have the power to move the entire industry forward, for better or worse.