Binance Clears Up FUD Around Its KYC Breach

Updated on Feb 4, 2020 at 11:11 am UTC by Teuta Franjkovic · 4 min read
Photo: Shutterstock
Photo: Shutterstock

The KYC (Know Your Customer) data of thousands of Binance users have been reportedly hacked and the IDs are being posted in a Telegram chat group. CZ described rumors circulating as an attempt to spread “FUD”.

A Telegram channel dubbed “FIND YOUR BINANCE KYC” has allegedly been spreading know-you-customer (KYC) information including photos, passports, IDs, which it claims is of Binance‘ users.

Thousands of people have already joined the channel today and it’s still not sure if these KYC documents are a result of an internal leak or the documents came from phishing attacks or a KYC account selling service.

Leah Li, global PR manager at Binance confirmed that there are irregularities in comparing this data to the data in their system.

“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.”

Be it as it may, a Telegram user by the name, “Guardian M”, started dumping the proof of the allegedly “breached” KYC data of Binance customers. There was a total of 851 photos of KYC data uploaded on this Telegram group and it contained the link that reported the hack.

Binance’s CEO ChangPeng Zhao immediately tweeted:

Also, the exchange has promised its users that they will try to maintain “the highest degree of transparency”.

In their announcement, they said that most images that are made public seem to be dated from February of 2018, at which time Binance had contracted a third-party vendor for KYC verification in order to handle the high volume of requests at that time.

“Currently, we are investigating with the third-party vendor for more information. We are continuing to investigate and will keep you informed.”

The company added that it’s a great possibility that this could be the same data set that already leaked in January this year. Just for a reminder, a darknet hacker then revealed hundreds of images purporting to be stolen know-your-customer data from leading crypto exchanges.

Binance then said every image processed through Binance for KYC purposes is embedded with a hidden digital watermark. These are “only perceptible under specific conditions” and the data includes information on the person who initiated the movement of the images – which could be used to identify an inside job if one were to happen. Crucially, it stated that “these watermarks can be detected even if the images have been modified.”

Let’s not forget that a few months ago, Binance suffered a major hack in which it lost 7000 BTC, worth around $40 million. The exchange assured its users that their funds would not be affected due to this incident and said that it will use the Secure Asset Fund for Users (SAFU fund) for fully covering the losses.

Binance said that this time hacker claims he has KYC information from multiple exchanges.

“When asked to prove the source of the data, the individual demanded 300 BTC and refused to supply irrefutable evidence of their findings. Later, they went to the press under false pretenses, posing as a white hat with good intentions. The relevant law enforcement agencies have been contacted and we will be working closely with them to pursue this person.”

Also, from the company, they are offering a reward of up to 25 BTC to anyone able to provide any information to help identify this person.

Binance Wants to Join Libra

In other news, Binance has allegedly been in talks to get involved in Facebook’s Libra project, by listing the coin when the time comes. However, CZ claims Binance still hasn’t joined and said that he prefers listing coins that already have lots of users. However, if it launches, probably it’ll gain a large number of users and be able to trade it for other coins.

CZ commented:

“As an exchange, we should stay neutral. So we don’t really comment on coins; we don’t like or dislike coins. We just provide liquidity. It’s most likely Libra will get a large number of users, no matter how much people hate it.”

Altcoins, Binance, Bitcoin News, Cryptocurrency news, Editor's Choice
Teuta Franjkovic
Author: Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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