Binance anti-crypto crime alliance

Fed up with scams and hacks, Binance launches industry-wide alliance against crypto crime

Binance, one of the world’s biggest exchanges, believes closer collaboration between exchanges, analytics firms, and cybersecurity experts can help reduce thefts and abuses

Scams, hacks and fraud have been something that the crypto world has struggled to stamp out since its inception—but now, a new partnership is aiming to create an alliance where an “ecosystem of collaborators” work together to stop crime in its tracks.

Binance, one of the world’s biggest crypto exchanges in terms of trading volume, is teaming up with the data privacy software provider Oasis Labs to launch the CryptoSafe Alliance.

In time, it is hoped that members of the alliance will be able to share and access real-time intelligence on hacks, scams and other malicious activity in private—meaning sensitive information concerning users and businesses doesn’t need to be shared with rivals. It’s hoped that there will be a better chance of safeguarding funds as a result.

“Crypto fraud is an ongoing problem costing many users and businesses a lot of money,” a representative of Binance’s security team told Modern Consensus via email. “This alliance brings together the necessary reports and data from multiple exchanges, security and compliance firms, and community members that [are] needed to build a more resilient crypto industry for all.”

A Binance-led initiative

Although the newfound alliance is led by Binance, members of this new ecosystem will eventually include other exchanges, blockchain protocols, cybersecurity experts, and compliance firms.

“Each year, millions of dollars in cryptocurrencies are stolen from users and crypto exchanges. These stolen funds are laundered and distributed to wallet addresses around the world,” the representative said. “With more proactive sharing of information and closer collaboration between organizations in the industry, many of these thefts and abuses can be prevented.”

They added that bad actors have been “plaguing” the industry for too long—and closer ties were essential to strengthen the industry’s long-term defense against malicious behavior.

Binance CEO Changpeng “CZ” Zhao said in a release that the alliance represents his exchange’s commitment to building a more resilient crypto industry for all.

“Ensuring security is a consensus among the whole crypto community and players,” he said. “A collective effort and forging closer ties amongst members will better ensure the security of the global cryptocurrency community and integrity of the broader ecosystem to achieve this common mission. We encourage more members in the industry to join the Alliance.”

With a growing focus on security and confidentiality, Oasis Labs CEO and founder Dawn Song said a main goal of the CryptoSafe platform is to enable  “exchanges and other key players in the ecosystem to share threat analysis and reports without compromising sensitive data.”

More members of the alliance are set to be unveiled at a later date—and interested exchanges, blockchain protocols, cybersecurity experts and compliance firms are being invited to get in touch with Binance if they would like to get involved.

 A challenging landscape

Exchange hacks are nothing new, although the most serious of the recent attacks was the pair of successful 51% attacks on the Ethereum Classic blockchain on July 31 and Aug. 8.

Beyond that, it seems like there’s a new scheme emerging every day in crypto—particularly via social media. These have led Apple co-founder Steve Wozniak and Ripple CEO Brad Garlinghouse to sue YouTube for repeatedly failing to take down giveaway scams. Indeed, as reported by Modern Consensus at the end of July, there has recently been a spate of new Bitcoin scams in Russia—and all of this comes as crypto exchanges in the area report growing levels of demand for digital assets.

Nor have high-profile incidents such as the recent Twitter hack that targeted accounts belonging to public figures helped to rehabilitate the crypto sector’s image. As a result, it should come as no surprise that the U.S. Secret Service has been seeking specialist help in order to access blockchain analytics. Last month, the agency inked a four-year deal worth $183,000 with Coinbase—prompting a staunch defense from Brian Armstrong, the exchange’s CEO.

Updated at 10:05 a.m. on Aug. 27, 2020 to add quote from CZ.

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Connor Sephton is a journalist with an interest in cryptocurrencies, personal finance, and financial inclusion—as well as the challenges the crypto industry faces in achieving mainstream adoption. He owns cryptocurrencies.