Binance KYC Hack: Exchange Offers Lifetime VIP Compensation for Victims

Michael LaVere
  • Binance issued an update on the KYC hack that surfaced earlier in the month, pointing towards third-party vendors. 
  • Exchange is offering a lifetime VIP promotion to users affected by the hack.

The world’s leading cryptocurrency exchange Binance has announced a compensation plan for victims of the KYC hack that surfaced earlier in the month. 

Lifetime VIP for Victims

According to the official blog post published on Aug. 23, the exchange is offering a lifetime Binance VIP membership to users who were affected by the KYC hack. The membership will include preferential trading fees, support and “more services,” with the exchange encouraging users to contact the exchange about their possible security breach. 

Binance calls the investigation into the hack “ongoing,” and says that they are still pursuing leads in relation to the source of the images that surfaced online matching the exchange’s user information. 

Binance also puts some of the responsibility for the hack on third-party vendors and points out the inconsistencies between the leaked KYC data, 

During our review of the leaked images, there were multiple photoshopped or otherwise altered images which do not match the KYC images in our database and are being accounted into the comprehensive investigation. In addition, every image processed through Binance for KYC purposes is embedded with a concealed digital watermark, which was notably absent from all of the leaked images.

In a similar situation, crypto platform Huobi also pointed to hackers using third-party vendors to obtain client information, as opposed to a direct breach in the exchange. 

Binance calls security their “top priority,” and is committed to “protecting our users in all possible circumstances.” The exchange claims to use an AI-based facial verification function first introduced in 2018, while upgrading their indexing of KYC data in 2019. 

IOTA Foundation to Reopen Mainnet by March 2 after $2 Million Hack

The IOTA Foundation, the non-profit organization behind the IOTA network, has announced it plans to reactivate the IOTA Network by March 2 after halting it over a $2 million hack.

According to the non-profit organization, it’s working on creating transition tools for users to transfer funds from their existing wallets to new ones so they can avoid any further losses and bring the network back online.

As CryptoGlobe reported, the IOTA Foundation turned off its Coordinator node, which is responsible for validating individual transactions on the network, earlier this month after users started reporting their funds were being stolen from the Trinity wallet, a wallet designed by the Foundation.

Since it turned the coordinator off, it has been working with law enforcement agencies, including the German Center for Cybercrime and the U.S. Federal Bureau of Investigation, to identify the cause. A total of “8.55 Ti”, or $2.3 million worth of IOTA tokens were lost.

In a post-mortem report, the Foundation detailed the vulnerability was the result of an integration with a fiat-to-crypto onramp platform called MoonPay that was being used with the Trinity wallet. Its investigation found a hacker was able to take over MoonPay’s content distribution network, and using it infiltrated the Trinity Wallet to distribute malicious Software Development Kits (SDKs).

The Foundation’s internal analysis of affected Trinity caches found irrefutable proof that they had been compromised with one of several illicit versions of Moonpay’s software development kit (SDK), which was being loaded automatically from Moonpay’s servers (their content delivery network) when a user opened Trinity.

The attacker, according to the Foundation, made sure he avoided triggering cryptocurrency exchanges’ know-your-customer (KYC) checks when sending funds to cash out, keeping the threshold below $10,000.

The IOTA Foundation was, according to the report, only able to identify 50 victims from the attack, and doesn’t know exactly how many users were affected by the attack. As such, it’s asking those who used the Trinity desktop wallet to use a migration tool.

The organization’s move to shut down the Coordinator node and essentially bring the mainnet to a halt was a controversial one, as various cryptocurrency users are now on social media claiming the IOTA network is centralized.

Featured image via Pixabay.