It was in May when Binance had been hacked for the first time in its life cycle of 2 years. That incident was handled very professionally by them, and they set the bar high for every other cryptocurrency exchange. Now today Binance is making the headlines again for a similar reason – the only difference is that instead of cryptocurrencies this time we’re talking about the theft of KYC data.
The shocking news of Binance KYC data being stolen came out yesterday, and it was revealed by the company that somebody is blackmailing them on the pretext of revealing KYC data of 10,000 Binance users. The blackmailer, according to Binance, was asking them to pay 300 BTC (almost $3.5 million) for not doing this. Now today Binance has announced a reward of 25 Bitcoins (almost $290,000) for anyone who reveals the identity of this blackmailer.
It’s still not clear if data leaked by the mysterious hacker is indeed stolen from Binance or not. Binance has said on its part that it’s still investigating to find out if its KYC database was indeed breached, or if this data is from the data that was stolen and publicized from multiple cryptocurrency exchanges in February 2018. Binance says that it had hired a third-party vendor for handling the high number of KYC requests it received. So basically, investigation of this breach is being done at a third-party vendor instead of Binance itself. This makes the entire case even more twisted.
Now, whether this claim of the blackmailer is legitimate or not… it has certainly sounded the alarm of privacy in the minds of many cryptocurrency users. Privacy has always been a subject of concern for most crypto users, and after Facebook’s various scandals those concerns were at their peak. Now when famous cryptocurrency exchanges are also being linked with privacy breaches, there’s a good chance that many crypto users may start using other means to purchase crypto that require little-to-no documentation from them (I.e. peer to peer channels).