Does Binance need KYC

More details are coming up concerning the Binance KYC leak, and it is not looking good at all for the crypto exchange. The Binance founder, Changpeng Zhao, has brushed the event off as old news. However, information from hacker Bnatov Platon seems to reveal what could be a significant security issue within the exchange. 

Information provided by the hacker shows that the recent KYC leaks incident is tied with the May Binance hack, where 7000 BTC was lost. Binance was quick to own up to its failure in that hack describing it as a “large-scale security breach.” The crypto exchange said that hackers who had accessed the user APIs and 2FA codes were behind the loss.

Hacker; Binance lost BTC and KYC data in May hack

Binance, though, did fail to mention one crucial factor; that KYC data had also been leaked. Bnatov Platon has said that the KYC data uploaded on a Telegram account was sourced from this event. The hacker is nevertheless quick to distance himself from the hack saying he wasn’t the perpetrator. 

Bnatov Platon describes himself instead as a hacker who hacks other hackers. He also reveals that the KYC information was leaked through the assistance of an inside person in Binance. Binance, on the other hand, has pointed its finger to a third party KYC provider as a possible source of the leaked info. 

They have admitted that they had a contract with a KYC service provider in February, the date that shows on the images that accompany the data. The hacker has opened a twitter account seemingly to call out Binance for not being honest with its users. 

In one post he writes, “How did I get them? Do not ask me. Ask Binance. From 3rd vendor? It must be kidding. From phishing? Wow if that’s the case, I have top-class phishing skill indeed”. CoinDesk says that they have confirmed that at least two of the profiles provided by Bnatov are genuine. 

One nevertheless seems to have a photo that has been tampered with, but the victim has affirmed that she had a Binance account at the time of the data leak. Bnatov has said that he is a “white hat hacker” and had hoped to work with the exchange to counter its vulnerabilities. The hacker had also hoped that Binance would give him some bug bounty for providing data on the hack.

It seems that Blanatov’s negotiations with Binance hit a dead end after he asked for a 300BTC bounty. Bnatov had threatened to release the data to the public, should the exchange not honor his wish. Binance then went on to issue an alert on their blog saying that the KYC data was only similar to actual Binance data. Reasons? It did not have the exchange’s watermark that proves authenticity. The Binance security team also mentioned that the person behind the data leak had been demanding 300BTC from them.

Hacker says he has tons of data

Blanatov claims that he has over 60,000 more KYC data awaiting release. The hacker has made it clear that the hack was partly an inside job. The inside person made some APIs public to aid the access of client’s accounts. Blanatov days that he hacked the storage where the hackers stored the API keys they had accessed from Binance. 

He says that the data has critical account security data, including passwords and email addresses. The data is mainly sourced from accounts opened in 2018 and 2019. Blanatov has alleged the hackers used this data to write a malicious script that at first allowed them to withdraw 0.002BTC. The malicious code was then embedded in the BlockMason Credit Protocol’s buy order, an obscure token which is then converted to BTC. 

Blanatov says that the Bitcoin stolen during the Binance hack was hidden in a wallet hosted by Blockchain, the team behind the PIT exchange. The hacker says he has been tracking the movement of stolen 2000 Bitcoins through Huobi, KuCoin, Bitmex, and Yobit. By releasing the original KYC files on Instagram, Blanatov had hoped that Binance would be moved to announce the true extent of the hack.

The chief technologist at VisibleMagic, Viktor Shpak says that the metadata on some of the KYC data leaks presents as an API key attack. The data also points to a likely hood of a back door placed in Binance. Blanatov claims that he planned to make Binance the first crypto exchange that has brought hackers to justice. He spoke to Ted Lin, the exchange’s Chief Growth Officer, who was at first receptive of a bug bounty. 

Lin, nevertheless, was not happy with the “FUD campaign” Blanatov was creating. He also told the hacker that they do not react to extortionists. Blanatov on his end claims to be wealthy, as an owner of an exchange, a third the size of Binance. He also says that he can hack the Binance hackers for 600 to 700 BTC if he wishes to. 

Blanatov on Twitter writes, “People keep asking, “Why are you releasing those KYC photos?”, “How did you get them?”. The reason I am releasing those KYC is simple: To warn you people who’re dealing in Binance. If I need money, I would sell it underground, not to publish it.”

Jason Chan

Jason lives in Singapore and got into the cryptocurrency space in 2017 with the belief that it will change the world for the better. In his spare time Jason loves indoor climbing and video games.