Omeg₳Candle

@binance just used a zero-knowledge proof to show customers their money is there, four days after the largest crypto theft on record. What happened: - 29 Oct: about $6.3B was taken from Binance's hot wallets. The FBI attributed it to North Korea's TraderTraitor group - Binance says it has replaced about 95% with its own funds, and withdrawals are reopening in phases - 2 Nov: it completed a zero-knowledge proof for its 31 Oct snapshot. 10 assets, each backed at least 1:1 - Customers can run Binance's open-source verifier and check their own balance was counted, without seeing anyone else's What it doesn't show: it covers only those 10 tokens, at one moment, and it isn't an independent audit. The next snapshot is 4 Nov, and that proof takes 40–50 hours. Could @MidnightNtwrk have stopped the hack? No. The attackers abused Binance's own wallet-signing systems. That's a key management failure, and privacy doesn't fix it. Where Midnight's approach does help: 1. Proving without a public wallet list. Binance's proof hides customer balances, but its reserves side still relies on a published list of its wallets. Research from 2015 (Provisions, co-authored by Dan Boneh) showed an exchange can prove solvency without revealing its addresses or its totals. Prove the claim, keep the data private: that's what Midnight is built around. 2. The second wave. Binance is now warning about scams aimed at customers waiting on withdrawals: fake proof-of-reserves sites, paid "recovery" offers, wallet approvals. Midnight's own write-up argues that public balances and transfers let attackers pick and time their targets. Shielded balances take that data away. They won't stop someone from signing a bad approval. 3. Privacy with screening. The attacker's wallet was funded through Tornado Cash. In the Sig Network design Midnight announced last week, the contract sets which deposits it accepts and credits only those that pass screening. Proof of reserves used to be a niche idea. This week the biggest exchange used one to calm users after the biggest theft. That pattern shouldn't only show up after a crisis. Would a ZK proof of reserves make you trust an exchange again, or is self-custody the only answer now? Sources: Binance Recovery Update #5: nitter.cf/binance/status/2117237… Proof details (crypto.news): crypto.news/binance-complete… FBI attribution and 95% (The Block): theblock.co/news/business/20… How the attack worked (Chainalysis): chainalysis.com/blog/binance… Scam warning (CryptoSlate): cryptoslate.com/binance-warn… Provisions paper: eprint.iacr.org/2015/1008 Midnight on shielded assets and phishing: midnight.network/blog/how-sh… Midnight × Sig Network: midnight.network/blog/sig-ne…