In February 2023, Coin Cloud, a Bitcoin ATM operator with over 4,000 machines throughout the U.S. and Brazil that once boasted more than 4,000 machines before filing for bankruptcy in January 2023 due to financial difficulties, has been purportedly targeted by an unidentified hacking group in an attempt to take advantage of Coin Cloud's insecurity.
The recently discovered security breach of Coin Cloud, which was once a prominent Bitcoin ATM operator, has sent shockwaves through the cryptocurrency industry as a result of the incident. As a result of an unknown hacker intrusion into the company's backend system, sensitive customer information and proprietary code have been accessed by hackers.
A total of around 70,000 client selfies have been compromised, and nearly 300,000 individuals' personal information has been exposed in this breach.
The incident has been revealed by vx-underground, a cybersecurity group that provides a report explaining how digital currencies operate under inherent risks that need to be understood.
In a recent report, hackers are purportedly using covert methods to discuss their plans, raising concerns that the stolen data may be revealed to the public on a public conference call.
According to the report, the breach affects many types of consumer information, including basic personal details, social security numbers, occupations, and addresses of physical locations.
According to reports, affected customers are reported to be from the United States and Brazil.
Data breaches of this magnitude are particularly alarming given the scope of the breach. Aside from the personal information that hackers have obtained, the hackers claim that they have obtained 70,000 images of selfies used by customers as part of their identity verification process in the financial industry.
A breach of this kind could be of even greater significance.
An anonymous cybersecurity account known as VX-Underground claims that hackers have breached the personal information of 300,000 Coin Cloud customers, including vital information such as Social Security numbers, date of birth, names, email addresses, telephone numbers, occupations, and addresses, among others. This information is being retrieved by hackers who are using pseudonymous accounts.
There is the potential to make physical threats, such as stalking, harassment, or targeted attacks, due to this disclosure of such personal and detailed information, which can be used by malicious actors. Aside from the financial risks, victims will also be at risk in real-world ways, which highlights the need for advanced cybersecurity measures and proactive efforts to protect sensitive information as soon as possible.
The VX Underground has reported that the hackers were able to steal the source code of the entire backend of Coin Cloud thanks to compromising the data of US residents and Brazilian users. The compromised data includes information from US residents and Brazilian users.
In addition to Coin Cloud's financial difficulties, this cybersecurity incident adds to its woes.
Coin Cloud filed for bankruptcy earlier this year, and it now finds itself facing financial difficulties again. In the United States bankruptcy court, Coin Cloud announced on February 8th that it planned to file a Chapter 11 reorganization petition.
Despite this, Chris McAlary, the CEO of Coin Cloud and president, explained that this step was taken to protect the interests of its creditors by restructuring their debt.
The company's liabilities, according to a filing made on February 7th, ranged from $100 million to $500 million, whereas its assets were valued between $50 million and $100 million, which was quite the contrast.
Due to this breach, customers are advised to closely monitor their accounts and to take extra precautionary measures like the freezing of their credit reports, to lessen any potential impact of the breach on their overall financial health.
As a company, Coin Cloud has a lot at stake in the current crisis and its response will have major impacts on the way we see crypto ATMs in the future. How Coin Cloud addresses customer concerns and takes remedial measures will play an essential role in regaining trust among customers.
This financial imbalance ultimately led the company to seek bankruptcy protection, signalling deeper financial problems within the company, which is evidenced by reports that the company owes its creditors upwards of $50 million, a considerable amount more than its declared assets.
It was revealed in the bankruptcy documentation that Coin Cloud owed more than $100 million to Genesis Global Trading, a subsidiary of Digital Currency Group, in the form of debts. Coin Cloud detailed its outstanding debts in its bankruptcy documents. With a debt of approximately $8.5 million owed to Cole Kepro, the company is owed the second largest amount of money.
