Coinbase Data Breach Will 'Lead To People Dying,' TechCrunch Founder Says (decrypt.co) 34
An anonymous reader quotes a report from Decrypt: The founder of online news publication TechCrunch has claimed that Coinbase's recent data breach "will lead to people dying," amid a wave of kidnap attempts targeting high-net-worth crypto holders. TechCrunch founder and venture capitalist Michael Arrington added that this should be a point of reflection for regulators to re-think the importance of know-your-customer (KYC), a process that requires users to confirm their identity to a platform. He also called for prison time for executives that fail to "adequately protect" customer information.
"This hack -- which includes home addresses and account balances -- will lead to people dying. It probably has already," he tweeted. "The human cost, denominated in misery, is much larger than the $400 million or so they think it will actually cost the company to reimburse people." [...] He believes that people are in immediate physical danger following the breach, which exposed data including names, addresses, phone numbers, emails, government-ID images, and more.
Arrington believes that in the wake of these attacks, crypto companies that handle user data need to be much more careful than they currently are. "Combining these KYC laws with corporate profit maximization and lax laws on penalties for hacks like these means these issues will continue to happen," he tweeted. "Both governments and corporations need to step up to stop this. As I said, the cost can only be measured in human suffering." Former Coinbase chief technology officer Balaji Srinivasan pushed back on Arrington's position that executives should be punished, arguing that regulators are forcing KYC onto unwilling companies. "When enough people die, the laws may change," Arrington hit back.
"This hack -- which includes home addresses and account balances -- will lead to people dying. It probably has already," he tweeted. "The human cost, denominated in misery, is much larger than the $400 million or so they think it will actually cost the company to reimburse people." [...] He believes that people are in immediate physical danger following the breach, which exposed data including names, addresses, phone numbers, emails, government-ID images, and more.
Arrington believes that in the wake of these attacks, crypto companies that handle user data need to be much more careful than they currently are. "Combining these KYC laws with corporate profit maximization and lax laws on penalties for hacks like these means these issues will continue to happen," he tweeted. "Both governments and corporations need to step up to stop this. As I said, the cost can only be measured in human suffering." Former Coinbase chief technology officer Balaji Srinivasan pushed back on Arrington's position that executives should be punished, arguing that regulators are forcing KYC onto unwilling companies. "When enough people die, the laws may change," Arrington hit back.
Oh well (Score:1, Insightful)
If you can afford crypto to be worth going after, you can afford some guns to defend yourself.
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Unfortunately, it is not that simple. Even the rich depend on society being mostly non-broken and that includes abductions being rare.
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Well, as the newest modern American curse apparently goes, "may you have the day you voted for". The cryptobruhs have traditionally opposed government regulations of their sector any kind, certainly those that deal with personal data.
It is quite obvious why, too, a lot of the "crypto" is simply tax evasion.
So now they are going to deservedly experience first-hand the results of the "industry-mandated" and "industry executed" measures that "protect" their identity.
Making Lemonade (Score:5, Insightful)
... amid a wave of kidnap attempts targeting high-net-worth crypto holders... Arrington added that this should be a point of reflection for regulators to re-think the importance of know-your-customer (KYC), a process that requires users to confirm their identity to a platform
Due to this urgent danger to rich people rules should be changed so that they can move cash around anonymously. If they can use this "crisis" to push this through it will have been well worth it. On to the next crisis!
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Re:Making Lemonade (Score:5, Insightful)
If you read the whole article it gets even better.
You see the problem is that these crypto companies don't want to collect this information and so can't be held responsible if they don't protect it.
I am dubious that "because If don't want to" is a valid legal doctrine to escape government regulations. It would seem most businesses everywhere would avail them of this protection immediately, if available.
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You see the problem is that these crypto companies don't want to collect this information and so can't be held responsible if they don't protect it.
Among other things they don't want to do, such as having to follow all the OTHER laws, like anti-money-laundering, anti-terrorism-funding, etc. that come along with "knowing your customer". It'd be so much easier to just do business with everyone equally. Don't ask, don't tell!
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I'm all for this rule. Then I can anonymously declare that I am rich and never need to show ID for any site.
I already drop site memberships when they make ID mandatory. Just them saying they will never give out the information does not mean that information is (forever) secure. It's not even at supposedly highly secured companies what with the weekly or so high profile breaches everywhere.
If I was a high net worth crypto holder (Score:1)
I mean in America you can wander all the money you want thanks to November but I'm not so sure the rest of the world is going to be A-OK with that.
Can you laugh yourself to death? (Score:1)
For the moment I'm ROFLMAO
Re:Can you laugh yourself to death? (Score:5, Insightful)
Will no one think of the high-net worth crypto holders? Oh the humanity!
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Will no one think of the high-net worth crypto holders?
Plenty of kidnappers are thinking this way, if the article is to be believed. IMO, anyone involved in crypto is 100% a criminal and shouldn't depend on society for protection.
Somehow, real banks manage (Score:5, Insightful)
Somehow, KYC has never been a problem for real banks and their customers. (Excepting when those customers are also criminals, in which case it's a huge problem for them.) So either,
(1) Banks secure their customer data better than Coinbase, or
(2) Something about Coinbase or its holdings is significantly more attractive to the criminal element than cash money.
Probably both.
Notice how crime keeps turning up every which way you look when it comes to crypto? Funny...
Re:Somehow, real banks manage (Score:4, Informative)
Banks are higly regulated and know that they must keep their customer data safe at any cost. No comparison to the slap-dash DeFi trash that runs the crapcoin universe.
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Thanks. It is the thought that counts.
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> Somehow, KYC has never been a problem for real banks and their customers
Last I heard banks were being hacked to about $40B per year.
The money is transferred away digitally and the banks just cover it (or they have the Fed print more dollars to cover it).
Most crypto holders have a majority of their funds in self-custody so criminals will want to torture them for their keys.
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I can't think of anything better... (Score:2)
Than a bunch of crypto assholes getting kidnapped and murdered for their funny money.
And that is a key difference in a real bank (Score:2)
They know that their customer's data leaking will get people killed. They have laws and regulations that force them to be careful on top. There will be real penalties when they are careless. Crapcoins are just DeFi crap that makes all the old, tired, known mistakes again. The only sane move is to stay away.
Balaji Srinivasan is a bad person (Score:2)
He's been one of the executives that could face jail time for their bad decisions that put their customers at risk.
Of course he's going to say it's the KYC laws that are bad, not the poorly designed systems he's responsible for creating.
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> Of course he's going to say it's the KYC laws that are bad, not the poorly designed systems he's responsible for creating.
Which of these is actually possible: financial privacy through crypto or unhackable computer systems?
You need one or the other to avoid creating this murder situation.
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I don't recall the last time a bank was hacked where they got all the customers names, addresses, photos and account balances.
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Which of these is actually possible: financial privacy through crypto or unhackable computer systems?
Why are you assuming that one of them is possible?
Shit take (Score:2)
Regulators? (Score:2, Informative)
What does this guy mean by "regulators"? The entire point of crypto is to be unregulated. It's why these companies fought so hard and paid so many bribes to not fall under the same rules as banks, brokerage firms, and so on. They didn't want to be regulated and they got their wish.
If the people using these unregulated firms are now suddenly so worried they or their family members might be kidnapped or killed, perhaps they should have done their research to see what kind of security these unregulated comp
Smug Face (Score:2)
Oh no!
Anyway,
Many lessons to be learned. (Score:3)
Here's one: if the amount of money you have is so obscene that people knowing that amount will put you in grave danger then are being insufficiently taxed.
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Here's one: if the amount of money you have is so obscene that people knowing that amount will put you in grave danger then are being insufficiently taxed.
We don't have a wealth tax. For instance there is no tax that takes 10% of a rich person's money each year until they aren't rich anymore. That seems like it would be unjust, but even if you make the amount much smaller, it would disincentive keeping money in the US. Or it would have other effects you wouldn't want, for example it would be impossible to own a company unless you're also cash rich, since you'd have to sell your house or sell the company to pay the taxes. And being cash rich isn't great for th
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