Binance says that leaked KYC Data are from third-party vendor.

The Binance cryptocurrency exchange revealed that leaked users’ KYC data were obtained by hackers from a third-party vendor.

In July, the hack of the Binance cryptocurrency exchange made the headlines, hackers stole$41 Million worth of Bitcoin (over 7,000 bitcoins) from Binance.

Binance is one of the world’s largest cryptocurrency exchanges, its founder and CEO Changpeng Zhao confirmed that the hackers stole the bitcoins from a hot wallet that contained roughly 2 percent of the exchange’s total holdings. According to Zhao, the attack was particularly sophisticated and attackers used multiple techniques to gain access to the platform, fortunately, no other wallets were accessed by the hackers.

Attackers demand a ransom claiming to have hacked the KYC (Know Your Customer) data of thousands of Binance customers.

The attackers demand a ransom threatening the cryptocurrency exchange to release KYC (Know Your Customer) information of 10,000 users if the company did not pay a 300 Bitcoins ransom (roughly $3.5 million at the time of the hack)

Earlier in August, details of some individuals (i.e. photos of individuals holding their identity cards, such as passports and voter IDs) were leaked online. Now Binance confirmed that hackers obtained KYC data of its users from a third-party vendor.

The exchange recently confirmed that some of the leaked photos match actual accounts, but others were manipulated with Photoshop by attackers.

“The latest evidence of this investigation indicates that some of the leaked images overlap with images that were processed by a third-party vendor, which Binance contracted a few times between early December 2017 and late February 2018.” reads the update published by the company.

“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.”

The company pointed out that images processed through Binance for KYC purposes are embedded with a concealed digital watermark that was not present in all the leaked images.

Binance added that KYC data leaked online has been likely changed or used to set up fraudulent Binance accounts.

The company is still investigating the incident, meantime, it is notifying the potential victims, providing them “guidance on privacy protection and restitution,” and recommending that affected users should apply for new identification documents in their respective region.

Binance is also compensating impacted users with a lifetime Binance VIP membership, including preferential trading fees, support, and more services.

“We encourage users to contact us with questions and about restitution by submitting a request on the Binance Customer Support Center under “Security Issue.” Please make sure to verify you are being contacted via official Binance email communication.” concludes the statement.

“Protecting our users and keeping our systems secure is our utmost priority. We will continue to improve our systems and processes in our service to the community in a fast-changing industry.”

The exchange is also offering a reward of 25 bitcoins (roughtly $258,000) anyone who provides information that could allow identifying the attackers.

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Pierluigi Paganini

(SecurityAffairs – Binance, hacking)

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