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Since the year began, Binance has experienced two attacks on its networks, causing various losses. In May, Binance confirmed the first attacking stating that its platform was infiltrated and $40 million in Bitcoin was lost.
Binance is yet to confirm the second attack, which specifically targeted KYC user information.
Allegations were brought forward after images of users’ KYC information was shared on Telegram by the alleged hacker. Binance reaffirmed that their platform wasn’t compromised. Their evidence was that the pictures displayed lacked their digital watermark.
Now, various theories are also emerging concerning hacks. In Cointelegraph’s article, there is a suggestion that the two attacks could be linked. The article suggests that the attempt may have been as a result of unsettled debt, but these are only allegations.
With all the varying information concerning the Binance KYC hack, Insights Network surveyed to get the public opinion concerning these allegations and to get their own opinion on the Binance KYC hack. Insights Network is the leading blockchain survey platform in the world.
Key Insights and Demographics
The survey attracted responses from 3,792 KYC verified Insights Network users. Here are some of the key statistics from the survey:
- Total number of participants: 3,792
- Total number of questions: 8
- Total number of unique responses received: 30,336
- Total number of countries participated: 162
Questions Surveyed
Given the information already flowing on the internet, the questions by Insights Network focused on determining:
- How often the public engages in Binance related activities.
- The level of trust the public has for Binance.
- The reaction of the public if the allegations turn out to be true.
The questions are also arranged such that users have an easy time transitioning from one thought to the next.
Key Insights — Binance Hack and Dump is Real
From the responses received, the majority of the participants believe that Binance was likely hacked.
The results observed could have stemmed from several factors. These factors include the following:
- Media presence of the Binance KYC hack.
- It is possible that part of the respondents could have been victims of the hack.
- The presence of the alleged data on Telegram though unverified and denounced.
- The successful hack that took place earlier in the year.
Further, it is known, according to an article by Cointelegraph, that some platforms outsource their KYC data handling to third-parties. This is dangerous, given that KYC identities are being sold to create fake accounts in cryptocurrency trading platforms.
Fake KYC accounts are sold for as much as $1,500. Considering the numbers exchanges such as Binance attract, it wouldn’t be surprising to find out that the third-party service providers are selling the data they are contracted to protect.
It may be time exchanges part ways with some of their third-party service providers.
Key Insights — Binance Users May Consider Suing
Binance is a respected name in the cryptocurrency trading industry. It attracts hundreds of thousands of registered users weekly.
Cryptocurrency trading is an alternative source of income to some, to others; it is the primary source of income. Thus, if anything were to happen to user data, then it is likely that users would join to pursue a class-action lawsuit against Binance to safeguard their investments or to cover damages arising from data loss.
Now, in an article by Cointelegraph, it is made clear that Binance uses third-parties to manage their KYC data. Sam Town, in the same article, suggests that, in this age of cyber-attacks, platforms must manage their KYC data due to the sensitivity of the information they hold.
Further, the data submitted during the KYC process must also be reviewed. Users should not have to submit all their unique identifiers to be cleared. A more sober approach must be discussed.
Key Insights — Preventing Future Binance KYC Hacks
From the responses, the majority wants to prevent a repeat of the KYC hack, if the allegations turn out to be true.
Preventing the disaster before it arises must be the priority of exchanges. It may save a lot in terms of money and reputation.
As aforementioned, the KYC process is partially flawed in that a third-party is contracted to handle sensitive user data. There are lucrative offers on the dark web for such data. Thus, it may be difficult believing that your data is safe under third-party handling.
It may be the time that regulations are discussed comprehensively in the cryptocurrency trading industry to provide a safety net for the everyday trader. Users need reassurance that their data is safe with their service providers.
Key Insights — Hack Won’t Drive Them Off
The rate at which cryptocurrency exchanges are happening is scary. Though reduced over the years, the amount of money lost yearly to these hacks hinders the market from reaching its full potential.
In 2019 alone, almost $1 billion has been lost from hacks on popular exchanges. When you factor in the damages resulting from compromised data, the figure is well above $1billion. Such losses make crypto exchanges seem fragile and dangerous. However, despite all this, there is still support from the cryptocurrency community.
Support for the cryptocurrency industry is adequate and growing yearly. Those who have experienced loss in the industry are willing to get back into it. Exchanges are still operating as usual despite all the damages that have been recorded.
There is a willing, vibrant trading population.
Conclusion
Binance remains a leading cryptocurrency exchange despite the challenges it is facing now. It is likely to maintain its status, whatever the outcome of their investigations reveals.
Cryptocurrency traders are in it for the long haul. It is time that the crypto exchanges listen to the pleas of their dedicated users. Whatever fine-tuning needs to be done to the exchanges, traders will endure until these platforms are near-perfect.
Crypto exchanges need to work on their security. Hackers are only going to get better. Thus, exchanges need to be at the top of their game- always.
Finally, Binance will survive, whatever the outcome may be, as a result of a very loyal and supportive customer base. This will be no doubt music to CZ’s ears.
We’re excited to share more research results, and upcoming product releases with our community as well as a growing audience of early cryptocurrency adopters across the globe. Thanks for reading and your constant support of our journey!
Onwards and more insights,
Team INSTAR
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