A leak in the customer database of the maker of the crypto-cold store wallet maker Ledger puts over a quarter of a million Bitcoin and Altcoin investors at serious risk. Some had their accounts emptied, while others were at extreme risk of harming their families and homes.
The situation sheds light on a serious problem plaguing the cryptocurrency industry, and that issue concerns the privacy and security of personal data. With investors now being urged to be just as concerned about the security of personal information as they are about protecting their assets, the fact that KYC is enforced when exchanging cryptocurrencies means that risk will never go away completely. Here’s why KYC could be the source of the next big leak.
Not your keys, not your bitcoin. Not even your personal information
Even new crypto investors know the importance of keeping cryptocurrencies off exchanges and moving them to a cold store for safekeeping. Ledger, a cold store manufacturer, offers solutions to meet this need for security for digital assets.
Moving Bitcoin and Altcoins offline to a device that is not connected to the internet keeps digital assets safe and inaccessible to cyber criminals.
What Ledger users are now learning is that while cyber criminals cannot touch the crypto stored on the device, real criminals can use private and personal information from Ledger’s customer database to threaten physical harm when bitcoin and other assets cannot do immediately flipped.
A story just came out that involved a Reddit user who was threatened by a self-proclaimed meth addict demanding a ransom in XMR, or they kidnapped and murdered their family members who were found at the user’s place of residence.
Authorities have been contacted in this case, but a company responsible for selling safety and security has instead put its customers at great risk.
Why personal security and privacy are useless in a world of Crypto Exchange KYC
Crypto market vets have stated that these users should have realized that part of protecting their bitcoin and altcoins includes protecting personal information and strong personal security.
At the same time, companies need to be far more responsible to prevent such situations from occurring and should regularly delete customer data.
And if sensitive personal data such as name, address, telephone number have to be kept completely private at all times, what do investors do against the KYC cryptocurrency exchange?
More than a year ago, Binance KYC customer data was even said to have leaked, which included not only identification of information such as name or address, but also ID documentation. Such data exposure can lead to identity theft, digital asset theft, hacks, and more.
Due to government regulations, customers in the United States are particularly at risk due to the need for personal information. Consumers are forced to either completely forget about crypto, secure it with unorthodox means that also involve risks, or adhere to the imperative requirements that put them at risk.
There is no telling how the KYC data will be stored, or whether it is the company or a third party management solution that is processing it. In an industry based on trust, transparency, data protection and decentralization, interference by the state and negligence by central companies combined with human error and a weak security infrastructure will put personal data at risk for years to come.