Binance has gone on the offensive against hackers, setting a new standard in security for digital currency exchanges. According to their announcement, Binance will offer a $250,000 USD equivalent bounty to anyone who provides information that leads to the arrest of hackers involved in an attempted hacking incident on March 7, 2018. In addition, Binance has earmarked the equivalent of $10 million USD in crypto reserves for future hacker bounties.
Organizations like the SEC and the CFTC have the power of government force behind them to create laws designed to protect people from investing in scams. The results of such forced compliance are debatable. Regulatory frameworks did not protect people during the mortgage crisis of 2008. By contrast, the responsible parties, namely the banks and their representatives were bailed out, with zero criminal charges made. Could a free market solution have better results? It’s possible.
Binance is taking the right steps to make their exchange, and the industry better as a whole. After going offline to improve issues with their exchange on several occasions, they’ve not become proactive against hackers and have set a number of rules to claim the $250,000 bounty, as follows:
- First come, first serve. The first person to provide evidence that leads to an arrest will be the recipient of the bounty. The funds will be delivered in the equivalent amount of BNB tokens, with the exchange rate determined at the time of the transfer.
- Detailed information about the March 7, 2018 hack must be emailed to [email protected] as well as to local law enforcement agencies. In other words, it appears that Binance is looking for more help in pushing for an actual arrest. A person who provides such evidence would be expected to follow up with police, the FBI, or other government agencies to move an investigation along.
- Binance is okay with protecting the anonymity of the person providing such information as long as it is legal to remain anonymous according to the person’s local laws.
- Although point #1 does say that the bounty will go to the first person providing information, they have qualified this with the possibility that the bounty may be split across multiple recipients, if multiple sources and segments of data are used to lead to the final arrests made. Binance will decide how the bounty will be split under these circumstances.
Binance is beginning their hacker bounty program with this $250k reward for the March 7th attempt at infiltrating the exchange and stealing funds. As more hacking attempts are made, successfully or unsuccessfully, more bounties will be put up for help with identifying and arresting the responsible parties. The $10 million available for this fund is only the beginning. If other exchanges follow suit, there could be a new industry developed that focuses on crypto-cybercrime. With ten digital currency exchanges on board, each contributing $10 million to the fund, it could easily grow to over $100 million. This is plenty of incentive for private investigators and cybersecurity specialists to dedicate some or all of their resources to making the cryptocurrency trading landscape safer for everyone, all because of self-policing and private initiatives like this one, rather than forced compliance to regulations that may not prove effective.
Find out more about the Binance hacker bounty in the official announcement.