CZ: Binance Has ‘Decided NOT to Pursue the Re-Org Approach’ to Recovering Stolen BTC

On Wednesday (May 8, 06:29 UTC), just hours after digital asset exchange Binance had announced that it had been hacked and suffered a loss of around 7000 bitcoins, its CEO, Changpeng Zhao (aka "CZ") said that, after consultation with several prominent members of the crypto community, Binance had decided not to attempt a rollback on the Bitcoin network in order to recover the stolen bitcoins.

The attack on Binance was detected at 17:15:24  UTC on May 7 when a single Bitcoin transaction (representing BTC withdrawals from multiple user accounts) moved approximately 7,074 BTC out of the exchange.

Amazingly, just hours after Binance had announced it had been hacked, CZ went ahead with a Periscope Ask Me Anything (AMA) session that had been scheduled for 03:00 UTC on Wednesday (May 8). During this AMA session, CZ said:

"We've been working with other exchanges to block deposits from those hacked addresses."

Much more surprisngly, he also said:

"[On] the other topic of 'do we want to issue a rollback on the Bitcoin network'... Because right now, the 7,000 BTC is far higher than if we distribute that to miners. It would be far higher that what they got paid for the last few blocks. To be honest, we can actually do this probably within the next few days. But there are concerns if we do a rollback on Bitcoin network at that scale. It may have some negative consequences in terms of destroying credibility for Bitcoin. So, again, the team is still deciding that, and we're running through the numbers and checking everything."

This comment, understandably, shocked and angered the crypto community on Twitter. Here were just a few of the responses:

One of the first people to suggest the idea of a rollback on the Bitcoin network was Jeremy Rubin, who had tweeted about this less than an hour after Binance's security breach announcement:

Well, to the huge relief of the crypto community, at 05:20 UTC on Wedneday (May 8), CZ tweeted that Binance had decided not to go ahead with the rollback idea, and talked about its pros and cons:

 

It is imporant to note that what CZ means by the most recent tweet shown above is that although it might be technically possible to do a rollback, practically, "it's not possible" since it would do immense harm to the credibility of Bitcoin, which has immutability as one of its key value propositions.