Are 13 million Binance traders at risk of selling their personal information on the dark web, or is this just a scam? This is an issue that security officials have disputed, and the exchange has denied any breach.
Elsewhere, the US securities watchdog has settled charges against TrueCoin LLC, the issuer of TrueUSD, a $500 million stablecoin listed on more than 100 exchanges, including Binance and Coinbase (NASDAQ: COIN).
Has Binance been hacked?
The alleged Binance hack was first mentioned by a user on a dark web forum who claimed to own the personal data of 12.8 million traders. A user named ‘FireBear’ claimed that the data included the user’s name, birthday, phone number, address and email address.
Users allied with cybercrime group ‘Greavys’ were reportedly willing to sell their data through Telegram, a platform beloved by dark web fans for its enhanced privacy protections, but which also landed its founder Pavel Durov in jail .
Cybersecurity experts have linked Greavys to other known cybercriminals such as ‘Wiz’ and ‘Box’. The group was behind a $243 million heist last August, posing as Gemini representatives to contact Genesis creditors. They made victims believe their accounts had been compromised and guided them to reset their two-factor authentication.
However, Binance dismissed these claims in a statement sent to media outlets.
“This is false. “Our security team has investigated the claim and can confirm that this is not a Binance data breach,” the spokesperson said.
Security experts urged Binance users to remain vigilant regardless of whether a breach occurs. Oz Tamir, a security expert at Web3 security company Blockaid, said digital asset fraudsters tend to take advantage of this uncertainty by using social engineering techniques and wiping victims’ wallets clean.
“Even if this particular breach turns out to be fake, it is important for users to remain vigilant. Scammers can use personal information to impersonate Binance or other trusted institutions in order to trick users into giving up control of their accounts,” he told an outlet.
SEC settles $500 million in stablecoin TrueUSD
In a regulatory development, the U.S. Securities and Exchange Commission (SEC) agreed to an all-too-familiar fee with the companies behind TrueUSD, a $500 million stablecoin.
The SEC alleged that TrueCoin LLC and TrustToken Inc. defrauded investors by falsely claiming that TrueUSD (TUSD) was fully backed by U.S. dollar reserves.
The SEC’s complaint, filed in the Northern District of California, alleged that “a significant portion of the assets purportedly backing TUSD were invested in speculative and risky offshore investment funds to generate additional returns for Defendants.”
However, the founders continued to tout stablecoins as stable. In 2022, the offshore products they invested in suffered redemptions, but issuers continued to tout one-to-one support. Just a month ago, it was reported that 99% of TUSD-backed funds were invested in speculative funds.
The fare is all too familiar. Stablecoin issuers have been found to have lied about supporting their tokens, and while sometimes they do it to make a little more profit, sometimes their motivations are much more sinister.
Take for example Tether’s USDT, a leading stablecoin with 70% market share. The company was found to have ‘loaned’ nearly $1 billion to its sister company Bitfinex after the exchange lost customer funds to suspicious shadow bankers. This financial harm was severely punished by authorities with an $18.5 million fine and a “never again.” Years later, when companies under the FTX umbrella engaged in similar practices, the result was the collapse of multi-billion dollar long companies and the imprisonment of founder Sam Bankman-Fried. Tether, on the other hand, is reportedly still thriving, generating more than $5 billion in net profit in the first half of 2024.
For TUSD, the penalty was a $700,000 fine without a guilty plea, which the SEC still touted as a victory.
“This case is a prime example of why registration is important,” said Jorge Tenreiro, head of the agency’s cryptocurrency assets and cyber department. “Investors in these products have the key information they need to make informed decisions. “Because we continue to be deprived of information,” he said.
Today, TUSD is a pale shadow of its former self, with a market capitalization of $494 million (despite being the 7th highest on the market). At its peak late last year, it had a market capitalization of over $3.5 billion, was listed on more than 100 major exchanges, and had millions of users unaware that the issuer was gambling with their funds.
See: Leveraging Blockchain Technology for Data Integrity
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