Earlier this month, Binance announced that they had been the victim of a know-your-customer leak on August 7, 2019, when they were contacted by unknown individuals who demanded 300 bitcoins in exchange for withholding over 10,000 photographs from the leak. After this took place, Binance launched an investigation into the KYC data leak and the investigation is still ongoing as the company is trying to identify the source of the images similar to those that were leaked by a hacker
These images stem from the fact that many cryptocurrency exchanges require submission of an image of their customers in order to verify their identity. Binance has also announced that some of the leaked images coincide with images were processed by a third-party vendor from early February 2018 to February 2019.
Mitigating the Damage
Besides the work that Binance is doing to get to the root of the current predicament with the leak, they are also trying to compensate those who have been affected by the security breach as they announced in a recent blog post that they will be offering lifetime VIP membership to all users who have been affected by the hack.
The blog post states that Binance will be contacting all the potential victims with guidance on protecting their privacy as well as to offer restitution and has also recommended that all affected users should apply for new identification documents in their respective regions due to the compromised situation.
“We are compensating affected users with a lifetime Binance VIP membership, including preferential trading fees, support, and more services,” the post said.
Even though cryptocurrency exchanges are particularly susceptible to hacking by malicious parties, the end goal is not always to steal cryptocurrencies in themselves as these exchanges act as a hub of very valuable information regarding their customers and this could prove attractive to criminals. Binance is known to be very open with their community and their offering of compensation in light of this recent event will likely endear them even more to their users. base.