Binance (via Shutterstock)

Binance upgrades hacked customers to VIP

The cryptocurrency exchange also ‘highly recommended’ the 60,000 users replace their ID documents; restitution promised

In light of a hack that saw up to 60,000 customers’ IDs stolen, leading cryptocurrency exchange Binance is giving all affected users VIP status that brings a 10% discount on bitcoin trading fees.

The status upgrade was announced on August 23 on Binance’s blog about what it termed the “False ‘KYC Leak.’” The posting said that the data appeared to have been stolen from a third-party vendor it used around December 2017 and February 2018.

On August 6, Binance CEO Changpeng “CZ” Zhao announced that a hacker had demanded a 300 bitcoin (BTC) ransom—currently $3.1 million— for 10,000 stolen identity documents the exchange collected for “know your customer” (KYC) compliance purposes. 

“During our review of the leaked images, there were multiple photoshopped or otherwise altered images which do not match the KYC images in our database and are being accounted into the comprehensive investigation,” the post said. “In addition, every image processed through Binance for KYC purposes is embedded with a concealed digital watermark, which was notably absent from all of the leaked images.”

While it is contacting affected users, Binance added that it “highly recommend affected users to apply for new identification documents in their respective region.”

To compensate users for the inconvenience and cost, Binance is providing restitution, which can be accessed via the Binance Customer Support Center. In addition, all affected customers are being offered lifetime VIP status. 

Binance VIP level 1 generally requires a 30-day trade volume of at least 100 bitcoin and an account balance of at least 50 binance coins (BNB). This reduces the maker fee charged when an order is placed from 0.10% to 0.09% on bitcoin trades and 0.0750% to 0.0675% on Binance coin trades. In addition, earlier this month Binance added a 5% discount on the daily interest rate charged for margin trading to Level 1 VIPs. They can also borrow up to twice the standard amount. 

“Security is our top priority,” the post said. It pointed to improved safeguards “including an updated KYC verification system and AI-based facial verification function introduced in 2018, as well as the storage and indexing of KYC data with sophisticated data security technology upgraded in 2019.”

 You May Also Like

Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.