Tuesday, February 20

User accuses Binance of losing his bitcoins in a withdrawal to Taproot

Key facts:
  • A Binance user requested to withdraw his BTC to one address and the platform sent it to another.

  • Binance claimed that it was not their mistake, but after insisting with the claim it retracted.

Yesterday, the moderator of BitcoinStackExchange, Murch, alerted on Twitter that a user of Binance allegedly lost his bitcoins (BTC) when requesting the withdrawal of his funds from the platform to a Taproot address.

The reporter tagged to Changpeng Zhao in order to get a solution to the bitcoin loss incident, as the Binance customer support team responded to the user that it was not their mistake. Changpeng Zhao (aka “CZ”) is the founder and director of Binance.

CriptoNoticias was able to verify that the affected person is called Mario Duarte and declared in a Telegram group: “incredible that CZ has not made a comment with that tweet.” The Twitter post also details what happened, according to the alleged victim warning the community on the bitcoin StackExchange forum.

“This is what supposedly happened: 1) @binance announces that they will support Taproot. 2) The user requests the withdrawal to the P2TR address, Binance creates a P2WSH exit instead, burning the funds. 3) @BinanceHelpDesk blames user for mistake, no refund. “

Murchandamus, Bitcoin Core developer and moderator of the bitcoin StackExchange forum.

First, Binance does not take care of the mistake of transferring the BTC to another address

The user who claims to have lost his BTC posted on the forum: “I complained in the Binance support chat and they told me that Taproot is not supported and their system automatically transforms or converts to a BC1Q (native segwit) address”.

Although Binance a month ago communicated having enabled its compatibility with the latest Taproot update, the customer support team gave the user to understand that this is not the case.

As seen in the screenshot that the victim took from the chat with the support, Binance precisely replied: «unfortunately, as the addresses of BC1P [código con el que empiezan las direcciones de Taproot] are not supported for BTC withdrawals (you see a warning message when trying to withdraw BC1P), BC1P will be converted to a supported address of BC1Q ».

Ledger and the bitcoiner community help Mario Duarte get his BTC back on Binance

Binance support told the user who lost his BTC that the Platform does not make withdrawals to BC1P addresses. Fountain: @murchandamus / twitter.com

“Of course this is something beyond the usual and they are trying to convince me that it is my mistake while I continue to fight for them to take responsibility,” stated the user. In addition, Binance suggested contacting the support of Ledger, manufacturer of the hardware wallet of cryptocurrencies de Duarte, to see if they could help him get his bitcoins back, something he proceeded to do without finding a solution.

Still, he managed to get the attention of Charles Guillemet, Ledger’s chief technology officer, on Twitter, where he answered amazed: “this story is crazy.”

Pieter Wuille, who is a Blockstream engineer and Bitcoin Core developer, told the alleged victim on the forum: “This is not your fault, and you must demand that your bitcoins be returned to you. P2TR addresses (like all addresses) have a checksum, and this checksum algorithm was even changed for the introduction of Taproot. The fact that they accepted this address (even ignoring the misinterpretation as P2WSH) shows extreme incompetence on the part of the sender. ‘

On the bitcoin StackExchange forum, Samuel Dobson, a recently retired Bitcoin Core maintainer, also replied. He told her: “I absolutely agree that your mistake should be fully reimbursed; websites should never change the address provided to them. “

Given this, Pieter Wuille explained on Twitter: «The P2TR outputs contain a public key. The P2WSH outputs contain a hash of script. If you take a valid P2TR output, but use version 0 instead of 1, it will be interpreted according to the P2WSH rules. To spend, you now need a script whose hash equals the P2TR key. If it can, SHA256 is broken. “

Finally, Binance takes the mistake and promises to refund the BTC

After insisting on the issue, a day after what happened, Binance retracted what it said in the first instance and assured that it will refund its bitcoins, according to the statement of the victim. Mario Duarte revealed to CriptoNoticias that on December 27 the support responded that the Binance technology team was able to verify that there is an error with the withdrawal.

Despite having denied responsibility at first, Binance finally acknowledged its mistake and promised to return the money to the affected party. Source: Capture that Mario Duarte sent us to CriptoNoticias.

“The latest news I have from them is that they are supposed to reimburse me but I have to wait patiently,” he told us. In the screenshot of the conversation that he shared with us, you can see that Binance told him: “We are working on the necessary refund for this incident.” “We really apologize for any inconvenience caused,” he went on to say.

Mario Duarte explained: «That was the last interaction we had. I’m still waiting. How much longer? No idea”. Thus, the protagonist of this unfortunate story was to notify us when, indeed, Binance will make the refund, something that he does not know on what date it will be.

Faced with this outcome, the affected person published in a bitcoin group called “BTC Andrés” on Telegram which CriptoNoticias could access: “We did it brother. They were never going to respond. They had already told me no, to understand Ledger. There are a lot of people who give up fast. But one is willing to reach the end of the fart. I will sing the victory anyway when they actually pay me back ».

Mario Duarte also recognized the support he had from the bitcoiner community with a final awareness-raising message: «You have to be united and massify these problems because you cannot stand alone against these giants. I saved myself that the problem was technical and so badly handled that the developers gave me a hard push and the rest of us fell behind. “