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Investor loses 2.5 bitcoins on Binance and goes to court

IP of the hacker who attacked the Frenchman's account had never accessed the platform before

A Frenchman living in Brazil lost all his bitcoins on Binance in less than 2 hours, after a series of more than 6,000 trades on the platform. The case ended up in court and remains under investigation. According to the client, there was a security flaw in the Binance platform that made it possible for a time interval of 1h50m26s to hacker performed 6,257 trading operations, subtracting 2.5400732 bitcoins from the investor. Due to the very high number of operations in 20 different cryptocurrencies, almost BRL 50,000.00 was spent on fees with the broker. The investor’s defense alleges that exchanges are increasingly attacked by hackers.

Frenchman who lives in Brazil claims he lost all his bitcoins on Binance

One of the data presented by the investor when suing Binance in court is that the IP of the hacker who hacked into his account is on a known list of dangerous addresses. In addition, this IP had never accessed the Frenchman’s account, who had never allowed robot operations on his account.
IP of the hacker who attacked the Frenchman’s account had never accessed the platform before. In addition, it was found that moments before the consummation of the crime there was also a fraudulent attempt to withdraw, but this was detected and prevented by the brokerage. However, only withdrawal operations were blocked, which made it possible for the criminal activity to take place in another way, in this case, through the trade. The case took place on February 20, 2022. As there were more than 6 thousand operations, some made in a few seconds, the customer understood that even with his account deactivated for withdrawals, the trades were still released, which makes no sense in his view and its defence. In court, they ask for the repair of goods in more than R$ 500 thousand.

What does the victim’s lawyer say?

For not being able to reach an amicable agreement with the cryptocurrency broker, the demand ended up in the São Paulo judiciary. In consultation with the lawyer Raphael Souza, who represents the injured client, he declared to the livecoins what several exchanges are being targeted by cyber attacks and still profit from hacker transaction fees. “Cryptocurrency brokers have become one of the major targets of cyber attacks and have been repeatedly condemned by the Brazilian justice system to refund the amounts subtracted from their customers.

In our view, it is unreasonable for a broker to absorb part of the money diverted due to the fees charged on the high amounts of fraudulent operations carried out by the attackers on the Exchange platform.

In any case, if the crime arises from a failure to provide a service resulting from the inefficiency of the security system adopted, the exchange will respond objectively for the damages generated in relation to fraud and crimes committed by third parties, as clarified in art. 14 of the consumer protection code. In other words, the Exchange must refund the amounts stolen, in addition to refunding fraudulent transaction fees.

What does Binance’s defense say?

O livecoins reached out to Binance for comment on the case, and the exchange said it does not comment on ongoing proceedings.

“Binance informs that it does not comment on ongoing processes, but reinforced that protecting customers is a priority and that it works in constant collaboration with local authorities, including in any investigations. In addition, the company emphasized that it carries out permanent work to educate and support users, including best safety practices. In case of any doubt, the user must contact the Support Center directly and via official chat.”

In addition, the report questioned the exchange about the recent Reuters publication that puts Binance as a platform that helped drug dealers launder money. In response, the broker reports that the article used outdated and unverified information, and a broker page clarifies all the confusion. “The article uses outdated information from 2019 and unverified personal attestations to establish a false narrative. Binance has some of the strictest AML policies in the fintech industry and plays a significant leadership role in helping law enforcement address cyber and financial crimes. We continue to receive unfettered support from law enforcement partners around the world for our pioneering anti-money laundering work.
Being held accountable is part of being a leader, and at Binance we welcome that. We also strongly believe in the benefits of a strong, impartial and independent media ecosystem. The fact that this author’s last article was brutally fact-checked and refuted by several third parties, including the central subject of his story, Alexei Navalny’s chief of staff, demonstrates its lack of rigor and credibility.

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