Topic: Crypto Lender BlockFi Says Client Data Leaked In Security Breach (Read 260 times)

That's just crypto. People hear words like "Goldman Sachs" or any of those big names and they stop thinking what that actually means or even ignore the word "bankruptcy".


That "wasn't" was a typo (I actually intended to write "wanted") that completely changed what I wanted to say which was basically what you wrote.

Then those people really don't understand what is going on. This is Goldman Sachs getting ready to cash in on cheap assets from a bankruptcy case. That $2 billion will then be used to pay off creditors. Secured creditors like financial institutions come first; unsecured creditors like average users come last. And since Celsius claimed to have $12 billion on their balance sheets, then I won't be surprised if not a single cent of that $2 billion actually reaches an average user.

Bear in mind that this is literally exactly the same situation as was spelled out in Coinbase's recent SEC filings, where they stated that all their users are unsecured creditors. But everyone assumes Coinbase (who recently had to fire 20% of their workforce) is "too big to fail".

I don't think that's correct. It looks like that they provided the loan exactly because they are interested in acquiring a stake in the company. Perhaps acquiring a yet-to-be-decided stake was the price of the loan. As I questioned above, you don't hand out loans to companies on the verge of bankruptcy without something in return. And if that company has nothing else to offer, then they offer bits of themselves.

And I see some people whose money is stuck in Celsius already celebrating and looking at this as a bullish news...

And in the other news, looks like FTX wasnt to get a stake in BlockFi so that's probably the reason why they gave them $250 million loan.

Instead of taking the best from DeFi and banks, they took their worst.

From what I'm reading, the latest contender is Goldman Sachs, who are reportedly looking to create a fund of $2 billion to buy up a bunch of Celsius' assets (Read: Customers' coins) at a big discount when they finally declare bankruptcy. Since the users are unsecured creditors, they are way down the pecking order when it comes to getting any compensation, even though it is their coins which have been lost.

Ironic that their tagline was "Unbank yourself" and your assets are going to end up in the hands of a fiat bank.

These are the same mistakes people made in the ICO craze of 2017. Projects popping up left right and center promising obviously unsustainable returns and people just throwing their money at them and then acting surprised when it all collapsed. The people who created these scam projects made a lot of profit, and all their users/buyers/investors/etc. lost everything.

Speaking of people who still trust these platforms, it was so cringy to see people who have money in Nexo gloating over their public offer to take Celsius, thinking that must mean  Nexo is solid AF and that their money is safe while not realizing it was just a PR stunt in order to get more users.

I used to think that after each bear period crypto market comes up healthier but after seeing everything that has happened during this bull run I became way more pessimistic. All this will be soon forgotten and people will continue to make same mistakes as before.

They certainly want people to believe they know what they are doing, since their very existence depends on people trusting them enough to hand over their coins. But as you say, just look at the last few weeks. Stablecoins collapsing to nothing. Multiple large centralized exchanges and services massively downsizing and laying off thousands of staff they can't afford and shouldn't have hired in the first place. Celsius being insolvent. 3AC being insolvent. BlockFi desperately taking out a quarter of a billion dollar loan to remain solvent. Add all that on the back of ten years of hacks, leaks, data breaches, and worse, and it's clear that many of these so called "reputable" platforms are just Mickey Mouse operations. Use at your own (very large) risk.

Same on Reddit. No doubt things will settle down in the short term with this loan BlockFi have taken, but they must be hoping there are enough users who are naive enough to leave their money on the platform that they don't exhaust it and have to go begging for more.

One would think that these big players know what they are doing, but when you look at all the shit that has happened in the last few weeks and how they lost billions of dollars in incredibly risky stuff, this might end up being the similar case.


I don't know whether its true or not but I saw on twitter people complaining that they are waiting for more than a week for withdrawal. This won't end up good and Nexo might be the next.

And why do they need $250 million to support their balance sheet unless their balance sheet is way out of whack? Sounds like the sudden surge of users withdrawing their money in the light of the Celsius collapse has resulted in BlockFi's fractional reserve system experiencing a bank run. I'm also curious as to what promises BlockFi made to FTX to secure such a loan? You don't hand out $250 million to a struggling company without something in return.

This is just yet another red flag to add to long list of red flags for BlockFi that I pointed out in this thread: https://bitcointalksearch.org/topic/recent-events-should-make-you-withdraw-all-your-coins-to-your-own-wallet-part-2-5403254. If you still have funds on BlockFi, you should aim to cash in on this temporary $250 million reprieve and get your coins in to your own wallet today, before it is too late.

I would really like to hear the reasoning behind this statement, as looks to me if anyone is devil in this story its Blockfi who probably did God knows what with people's money  (like Celsius did) so now they need extra funds in order to cover up the losses.

Since these hacks are carried out by several different hackers it must be that the security of these systems is so laughable that even Anonymous can run amok in there.

Some of the local professional businesses in my area have little to no understanding of viruses and use computers full of malware to process customer data.

Businesses need to learn more about security.

A week has passed since the BlockFi platform announced a 20% staff reduction due to deteriorating market conditions, and as a result, the company sees a way out in cost optimization, and now they have announced the signing of a protocol of intent with the FTX exchange to receive a revolving credit line for $ 250 million. https://twitter.com/BlockFiZac/status/1539216594383028224

Some have already called this agreement a deal with the devil, for FTX behavior similar to the actions of the wolf of Wall Street.  https://twitter.com/FatManTerra/status/1539218509955317762

What a bum, one of the reasons why there's a saying "you'll become poor overnight in crypto" or similar, because of this irresponsibility of those who manage that platforms' security.

I remember everytime I received a crypto or finance related sms (although it automatically go to spam folder and blocked, thanks to google message) is the due to im a recent customer of ledger, and they was breached and it annoys me coz sometime they call and always got me worried everytime i see a weird/foreign number calling.
Well, you see, nano s is worth <$100, which means your info was considered worth like that, sh*t.

Wow, that's already 2 years ago then almost. The rate cut seemed to hit almost all these centralised lenders, including Nexo (which I actually waded in myself to try out maybe some time in late 2020). Funny that the ATH and weeks after was what triggered the rate cuts or rather, pushed them all into structured interest rates that forced you to either lock funds or invest in their own tokens.


Anything and everything to cover their asses. What's a few million in fines anyway when they somehow end up not needing to compensate "lost" funds?

Thanks @hugeblack, wasn't sure if I should add links as the account is new and may have been considered as spam
Will update

OpenSea NFT marketplace was hacked twice since last December for 780.000$. Qubit Finance platform for DEFI was also hacked last January for about $80m. LTX exchange platform was also hacked for about $8m during the same month.
Indeed, this has become very annoying, every once in a while we hear about the hack of a new platform, smart contract, or even a blockchain network.
I do not know whether hackers have all this competence to penetrate these platforms and networks, or is it caused by the poor protection of those systems (loopholes or inside jobs) !!
I see an unstoppable wave of successful hacks for both money and users info which is ino is most dangerous than losing money .

Unfortunately, we quickly forget and users will return to using BlockFi when positive news appears or greed begins to take over.

Personally, I used Kucoin and recommended them even though I read now about the news of the hack that already know about it a while ago, but I forgot what happened.

In general, according to what they said, ID & SNN was not hacked but I advise people to take their data seriously, especially new users.

Please add source --> https://cryptonews.net/news/security/3900609/

Wasn't Blockfi already in hot water recently for embezzlement? OR a hack of some sort (and again, every time a company says they've been hacked, feels to me like an easy way out to explain missing funds). Already settled fines from regulators, guess they're still finding it hard to escape scrutiny.

Methinks this serves a dual purpose: take away the attention from the scandal to try and out-SEO negative search results for Blockfi, and to also lay the finger of blame elsewhere for when the next exposé comes out, so they can say "oh, that must have been the fault of users who didn't change their access credentials when we told them it was leaked".

 

BlockFi said the breach had occurred on Friday through one of its third-party vendors, Hubspot- a sales management platform. The firm clarified in a series of tweets that its internal systems, and more importantly, client funds, were not impacted.

The lender also said that there was an ongoing investigation to understand the full scope of the data breach’s impact.

BlockFi also instructed customers to take no action on their end.

The breach comes as another blow to the New Jersey-based company, which was fined $100 million last month after a Securities and Exchange Commission (SEC) investigation found its high-yield products breached an investment act.  The firm was instructed to stop opening new high-yield accounts for Americans, and to register its products as securities- a first for crypto lenders.

In addition to the usual suite of wallet and trading services, BlockFi offers crypto loans, as well as high-interest accounts for crypto deposits, although the latter has been a main point of contention for the SEC.

Given its reliance on the digital world, crypto has been susceptible to hacks and breaches since its inception. A 2018 hack had seen more than $500 million in crypto stolen from Japanese exchange Coincheck, the largest amount stolen so far.

More recently, Singaporean exchange Kucoin saw more than $250 million stolen by hackers in 2020, while Crypto.com lost $34 million of customer funds to outside forces this January.

Outside of exchanges, a planned airdrop by the Ukrainian government, to crypto donors, was targeted in a phishing attempt earlier this month. Gnosis-based DeFi platforms Agave and Hundred Finance also recently saw about $11 million stolen.

Source: https://www.coinshots.com/news/crypto-lender-blockfi-says-client-data-leaked-in-security-breach