U.K. court orders Binance to identify and freeze hacker Accounts After a User Claims Funds Were Stolen

By Crypto Bucket

A judge in the United Kingdom has ordered Binance. The major cryptocurrency exchange, to identify and freeze the accounts of hackers. Why? A Binance user has claimed they lost $2.6 million to a hacker.

Binance Under a Court Order

A high court in London ordered Binance in August to address the issue of a $2.6 million hacking victim. This victim is user Fetch.ai., an artificial intelligence company. To do so, Binance must root out the hackers that have made their way onto the exchange and freeze their accounts and thus, assets. Binance will also be responsible for seizing the stolen assets. Fetch.ai appealed to the courts to compel action from Binance. The judge granted this request, in detail made public by Reuters.

About Fetch.ai

Fetch.ai is an artificial intelligence company incorporated in Singapore and England. It works in the field of AI project development for blockchain databases. The company told the judge that it was the victim of a hacking incident on June 6th. The hackers removed the funds from Fetch.ai’s account and then tried to remove the assets from the account. Yet due to restrictions, they allegedly sold them at a reduced value to a third party within an hour.

Binance has agreed to follow the court order and help recover Fetch.ai’s assets. In a response to the news, Binance describes its anti-hacking practices. A spokesperson from the company said that Binance does routine freezes of suspicious accounts. They said it does so in line with its policies related to security and protecting its users.

Represented by attorney Syedur Rahman at Rahman Ravelli, Fetch.ai responded to this. Rahman said that Binance contacted Fetch.ai to inform them about unusual activity. Before doing so, Binance had already frozen a sum from the account. Fetch.ai expects that Binance will follow the court orders. Rahman also gave his opinion on the anonymity of crypto assets. He said that the assets in truth can be “tracked, traced, and recovered.”

Cryptocurrency Security

Crypto is known for its transparent transactions, encryption, and security. This is due to how blockchain technology works. With blockchain, transaction data is verified and each individual has a unique wallet code. Despite this security, hacking incidents are not impossible. Many of the major names in crypto have dealt with hacking incidents. And hacking attempts are all too common.

Binance in particular has faced a growing amount of concern from the market. Many global regulators have warned against Binance. Examples include Malaysia, Thailand, India, and Japan. These warnings concern the company's alleged regulation avoidance.

U.K. Pressure on Binance

Another entity that has added to the pressure on Binance is the U.K.’s Financial Conduct Authority or the FCA. In June, the regulator warned consumers about the company. The statement argued that entities in the Binance Group are conducting unregulated activities. Binance states that the FCA's warning only applies to Binance Markets Limited, a separate entity.

Many UK banks have responded to this regulatory concern. The British multinational bank Barclays began blocking payments to Binance in June. The TSB Banking Group blocked customers from buying crypto in June as well. Finally, NatWest also cut payment channels to the crypto exchange.

Binance’s Response

In response to this scrutiny, Binance has said that it values compliance. It added to its international compliance advisory board and team. Furthermore, the company has said that it values compliance with local rules wherever it operates. The Founder of the exchange, Changpeng Zhao (CZ), has been vocal about his attitude toward compliance. He has said that his goal for the company is for it to receive licenses “everywhere."

To realize this dream, Binance is looking for a new CEO with a compliance background. This move comes after the current CEO Brian Brooks recently resigned. Brooks’ background was as a U.S. regulator.

To better understand the context Binance is in and the pressure it’s seeing, here is a look into the company’s background.

Background on Binance

Founded in 2017, Binance Exchange is the top crypto exchange in the world and the largest as of June 2021. It supports over 1.4 million transactions every second. Chinese-Canadian entrepreneur Changpeng Zhao founded Binance in Hong Kong. Zhao is a major member of influence in the industry.

Despite the concern about Binance's regulations, the exchange remains on top. To get a sense of the company’s competitors, here is a list of the top crypto exchanges, per CoinMarketCap’s rating:

  • Binance
  • Coinbase Exchange
  • FTC
  • Kraken
  • FTX US

Focusing on altcoin, Binance offers its users crypto-to-crypto trading. It offers more than 500 kinds of crypto and tokens. Binance also has its own blockchain-based token, Binance Coin (BNB). Binance is the #3 crypto in the world right now by market cap.

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