Cryptocurrency Exchange FTX and BlockFi Experience Data Breach Through Third-Party Hack

A security breach at Kroll, a third-party agency responsible for processing creditor claims for insolvent enterprises, has stolen user data from the bankrupt cryptocurrency exchange FTX and the loan platform BlockFi. While the leak did not include crypto account passwords or extremely sensitive information, consumers have been warned to be wary of possible fraudsters acting as bankruptcy trustees.

Both FTX and BlockFi responded immediately to the problem. According to a tweet from BlockFi, a “unauthorized third party gained access to certain BlockFi client data housed on Kroll’s platform.” Similarly, FTX stated that it is constantly monitoring the situation and intends to respond quickly to the breach.

Although the security incident did not impact FTX or BlockFi’s internal systems, there are fears that the revealed personal information might be used by bad actors to get access to more sensitive data such as seed phrases or passwords.

Kroll, the third-party service provider responsible for the breach, provides bankruptcy-related services to a wide range of businesses, including those outside of the bitcoin industry. Attempts by CoinDesk to approach Kroll for comment were greeted with silence. Notably, Kroll also specializes in cybersecurity consulting, offering a broad spectrum of services to manage global cyber risks.

Interestingly, Kroll’s involvement with the bitcoin business does not stop there. The company also supports Genesis Global Capital, a cryptocurrency corporation that declared bankruptcy in January of this year. CoinDesk is a subsidiary of Digital Currency Group, the same parent firm as Genesis Global Capital.

Both FTX and BlockFi had declared bankruptcy in November of the previous year. The decision was made after CoinDesk obtained information on FTX’s balance sheet. These two entities are now involved in legal processes in order to address their financial difficulties and return monies to creditors. Recent court hearings have shown that continuous legal bills are fast eroding the estate’s $1.5 million every day, further complicating the issue.