This Is the Second Time This Year for Binance
As the world’s largest and most popular cryptocurrency exchange, Binance has been a repeated target of the some of the world’s biggest and most prolific cyber thieves, though for the most part, the exchange has done a good job in keep itself and its customers safe. Unfortunately, its security measures were questioned earlier this year when the company fell victim to a hack that saw more than $40 million in BTC units disappear overnight.
The hack wasn’t an entirely negative event in the sense that bitcoin, rather than fall and struggle as it usually would after such an attack, ultimately spiked by more than $1,000 during a time when the crypto bulls were really beginning to take hold. The currency had begun its sudden and meteoric rise to the top of the financial ladder in early April of this year, but it was after the hack that the currency finally began to garner legitimate respect and notice.
For the most part, bitcoin was likely to fall following cyberattacks of such magnitude. That’s certainly what it had done in the past. This time, however, the currency was suggesting a new level of maturity that traders and enthusiasts hadn’t witnessed before. The currency jumped in price, which left a lot of people feeling impressed and wondering if, finally, bitcoin had developed a thick-enough skin to play in the big leagues.
Despite all this, Binance was still out nearly $40 million, and the hack had allegedly affected not just the company’s reserves, but those of individual customers. Executives of the exchange claimed they had enough to make up for the losses, but the attack still left a deep wound.
This time, it’s customer data that’s at the center of the problem. The company issued a statement explaining:
An unidentified individual has threatened and harassed us, demanding 300 BTC in exchange for withholding 10,000 photos that bear similarity to Binance KYC [know-your-customer] data. We are still investigating this case for legitimacy and relevancy. After refusing to cooperate and continuing with this extortion, this individual has begun distributing the data to the public and to media outlets.
Is There Really a Threat?
Despite this scare, Binance is claiming that there are several “inconsistencies” regarding customer data and the information that has thus far been released. The statement further claims:
At the present time, no evidence has been supplied that indicates any KYC images have been obtained from Binance, as these images do not contain the digital watermark imprinted by our system. With that said, our security team is hard at work pursuing all possible leads to identify the source of these images.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
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