BlockFi, FTX downplay data breach involving claims administration platform Kroll

The breach Thursday calls into question the security measures employed by the third-party vendor

article-image

John Hanson Pye/Shutterstock, modified by Blockworks

share

Embattled crypto firms BlockFi and FTX said they have both been indirectly affected by a cybersecurity breach involving third-party claims administration platform Kroll. 

BlockFi issued a statement on Wednesday attempting to assuage concerns that its internal systems and funds had not been affected by the breach that had occurred Tuesday. Kroll has reportedly confirmed unauthorized access to certain client data stored on its system.

Kroll is currently serving as the claims agent in the bankruptcy cases of both companies, facilitating the submission and administration of debtor claims through online portals

“To be clear, BlockFi’s internal systems and client funds were not impacted,” BlockFi said in its statement. “We understand this is frustrating. In the spirit of transparency, we wanted to make our clients aware of this incident before bad actors could utilize this information to clients’ detriment.”

Defunct crypto exchange FTX announced a similar incident, which it said had occurred on Kroll’s platform and that its own system and account passwords had also not been affected.

In a post on X, formerly Twitter, FTX said non-sensitive customer data of claimants had been compromised. Kroll has since taken measures to contain and remediate the incident, per the statement.

“Kroll is notifying affected individuals directly with measures that customers can take to protect themselves,” FTX said.

FTX collapsed late last year following allegations it had misappropriated customer funds through sister trading firm Alameda Research. BlockFi simultaneously fell victim to a liquidity crunch following its exposure to FTX through loans made to Alameda as well as funds trapped on FTX.

BlockFi is attempting to foil efforts by FTX, as well as former Singapore-based hedge fund firm Three Arrows Capital, over claims to billions of dollars they say are owed to them by the former crypto lender.

Both companies advised clients Thursday to remain vigilant for attempted fraud, phishing attempts and scam emails impersonating parties connected to the security breaches.

BlockFi also warned of an expected uptick in spam phone calls and phishing attempts against other bankrupt crypto firms in the weeks and months ahead.

FTX and BlockFi said they were monitoring the situation. Blockworks attempted to contact Kroll but has so far received no response.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Blockworks’ Digital Asset Summit (DAS) will take place March 18-20, 2024 at The Hilton London Metropole. Why London? Momentum.  London has become one of the world’s hottest crypto hubs.  Innovation is thriving, new institutional investors are flocking in, and regulators like […]

recent research

l1 cover.png

Research

This analysis focuses on financial metrics for general-purpose L1 blockchains. In many ways, L1s should be viewed as an entirely new asset class more comparable to digital economies than traditional businesses. L1s are the core infrastructure enabling the creation of new-age businesses like onchain protocols.

article-image

The coming weeks are set to bring clarity on whether the regulator appeals its court loss to Grayscale — a decision that could impact the timeline of bitcoin ETF approval

article-image

Various iterations of the popular social media tokenization app cropped up in September

article-image

Marathon’s error occurred at block height 809478, and Foundry ended up snagging the reward

article-image

The report comes almost a year after the collapse of FTX, which also plotted to offer such a service

article-image

The possibility that user-intent based applications could theoretically censor user activity is a “potential threat,” Chase Chapman says

article-image

I unequivocally believe Bitcoin will go down as one of the most pivotal innovations in history, and that has nothing to do with price