Cryptocurrency exchanges have had a friction-riddled relationship with Anti-Money Laundering and KYC policies when trying to work in collaboration with Regulatory agencies across the world.
But for cryptocurrency exchanges like Binance, they represent a necessary evil in order to do business in the world of centralized finance. There's one other field that cryptocurrency exchanges have a more than problematic relationship with - and that's cybersecurity and the safe storage of consumer information.
This morning, unfortunately, a large (and as yet increasing) proportion of users of Binance, have found themselves inadvertently on the sharp end of a potential hack and data breach. Resulting in the exposure of sensitive documentation, including drivers licenses, passports and other pieces of information used within the KYC and AML procedures.
Instead of being held by one individual, these have since been made public through a dedicated Telegram group. So far, some of these documents have been seen by nearly 100 people as the group increases in followers.
Fundamentally speaking, this raises some serious questions about the level of cybersecurity and data protection measures that one of the most well-known cryptocurrency exchanges in the world has in place.
So far, these pieces of documentation appear to be localised in the region of South-East Asia and the Pacific, but has the very real risk of leaking more international information from customers.
The Binance team has since issued a statement regarding the leak. Referring to it as a hoax, with information leaked being dated to early-2018, according to the team.
"On initial review of the images made public, they all appear to be dated from February of 2018, at which time Binance had contracted a third-party vendor for KYC verification in order to handle the high volume of requests at that time. Currently, we are investigating with the third-party vendor for more information. We are continuing to investigate and will keep you informed."