Binance, one of the biggest crypto exchanges, reported a security breach on Tuesday that resulted in the theft of $40.6 million, or 7000 BTC.
According to the company’s blog post, the hackers were able to obtain a large number of users API keys, 2FA codes, and potentially other information. With this information, the hackers withdrew 7000 BTC in one transaction. Although this is the only identified transaction so far, the company warns that additional accounts may be affected as well.
Binance says that it will cover the incident in full so no user funds will be affected. However, the company is currently suspending all deposits and withdrawals during its security review.
Have to perform some unscheduled server maintenance that will impact deposits and withdrawals for a couple hours. No need to FUD. Funds are #safu.
— CZ Binance (@cz_binance) May 7, 2019
The company reported it that maintains an emergency fund for these eventualities, called Safu, which will be used to cover the stolen Bitcoin.
What is Secure Asset Fund for Users (SAFU)?
SAFU, the Secure Asset Fund for Users is an emergency insurance fund. On the 3rd of July, 2018, Binance announced the Secure Asset Fund for Users.
“To protect the future interests of all users, Binance will create a Secure Asset Fund for Users (SAFU). Starting from 2018/07/14, we will allocate 10% of all trading fees received into SAFU to offer protection to our users and their funds in extreme cases. This fund will be stored in a separate cold wallet.
The origin of the term “SAFU”
During an unscheduled maintenance, Changpeng Zhao (CZ), the Binance CEO, tweeted out to users stating:
Funds are safe
After this, the phrase “Funds are safe” became regularly used by CZ to ensure users were aware that their funds were, in fact, safe.
Later, on May 19, 2018, a content creator named “Bizonacci” uploaded a video, titled “Funds Are Safu” on youtube. The video quickly spread and became a viral meme. The phrase “Funds are safe” was no longer used, and instead, the community began using the phrase “Funds are safu”.