Coinbase data hack sparks calls to scrap KYC

Coinbase’s latest data breach pays renewable calls to remove customer knowledge requirements (KYC) in the exchange of licensed cryptocurrencies.

The illegal actors broke the customer service agents abroad on the stock exchange in December 2024 to reach the personal information of 70,000 users. In May, Coinbase I confess The infiltrators have obtained data such as the government’s identity images and home addresses.

“All this security theater needs to be canceled as soon as possible. He said Banteg pseudonym on X. “KYC actually enables crime”.

However, it is not possible for exchanges simply to run their appearance on KYC, because it is an organizational state in many judicial states. Meanwhile, the alternatives to privacy, such as the Zero -Zero Evidence (ZK), remains limited to the cost and technical complexity.

Kyc becomes a defective gateway for Coinbase

The Coinbase data scandal puts the latest company listed in Nasdak immediately. But anxiety applies to all central encryption platforms that operate under organizational licenses all over the world. Central stock exchanges now collect and manage passports, government identity, personal photos, or even utility bills from users who only want to trade.

KYC is designed to reduce fraud, money laundering and terrorist financing. But in practice, users every day are the ones who end up exposure while the determined attackers find ways around the system.

“Anyone who is able to generate a passport or American diploma from the leading law school,” said Elia Coloshenko, CEO of Cyber ​​Security Company.

In February 2024, it was reported that people can succeed in Crypto Exchange checks by creating passports using artificial intelligence. Then in October 2024, another Amnesty International service appeared to add the video generation tool to bypass KYC encryption checks.

Related to: Artificial intelligence agents are preparing to be major exposure to Crypto

In 2023, the famous Blockchain Investigator Zachxbt shared details about a demonstration as the Gate.IO verification system exceeded a fake identity under the name of the North Korean leader “Kim Jong-one”. He said it was just minutes to do so.

Lisa Lu, Executive Director of the Secret Foundation, suspects that her personal data has been included in Coinbase’s breach due to the high pace of suspicious random mail messages she received.

“Only yesterday, I got five texts about Coinbase, saying that someone was trying to reach 2FA or withdraw money,” said Lould Cointelegraph. “The full goal of Web3 is to overcome the problems of Web2, not their repetition.”

In the financial sense, it is considered fortunate, because it does not hold a lot on the stock exchange. She is more worried about her own information that illegal actors may be able to access.

Coinbase highlights how web2 kyc fails

Kyc was not consider in mind, but now it is the cornerstone of how the organizers are forced to emerging the emerging industry to play with traditional rules.

He said loudly: “The problem is not that we are for people Kyc-resisted; it is doing it in a WEB2 way and not in the new way.” “Their goal is to tighten their risk model. It is logical from the work perspective – but it is completely not fair to users.”

Related to: Violent transparency processes in height: six attacks targeting investors

KYC practices arose in the 1970s under the US Bank Secret Law and were largely reinforced after the September 11 attacks through The United States of America Patriot Law Under the “Customer Definition Program”.

The encryption appeared at a later time but is increasingly dependent on identity verification. The illegal actors can buy stolen identities or KYC accounts that have been identified on Darknet markets, or use advanced tools, such as artificial intelligence, to overcome these investigations at the lowest cost.

Some users have invited Kyc and replace it with modern innovations, such as Zero-Knowledge (ZK) technology. This would allow the party to prove to another that the information is correct without the need to detect basic data. In theory, organizers can allow their compliance boxes while users keep their privacy.

“The problem is that the exchanges and many web 3 companies all do KYC independently, over and over again. But if I can check my identity once and then use this service to provide evidence of zero knowledge, it will be much better,” she said in a voice.

Coinbase’s scandal will not pay Kyc away

Although modern Blockchain solutions can improve privacy while checking the user identities, Kolochenko said that Kyc will continue to continue across the border despite its faults.

He said: “Kyc is here to survive, and the organizers will not reduce the tape. If there is anything, it will raise it. Without it, the encryption risk becomes a tool for every imaginative crime.”

Despite the security incident, Kolochenko rejected its classification as a violation of data, noting that the customer’s information was stolen through the bribe of Coinbase abroad instead of damaging infrastructure or technical weakness.

Regardless of the so -called, customer data has been hacked. There is a little that they can do other than the best continued practices to maintain a clean digital imprint.

https://www.youtube.com/watch?

Physical crime against encryption owners high.

“Run the bone madness – in a good sense. Update everything,” said Coluchanko.

Loud is a ZK technology defender, which can enhance privacy while meeting identity verification requirements. But even recognizes that technology cannot be implemented immediately due to its heavy arithmetic needs and expenses.

While Crypto users are walking to restore their privacy, organizers and exchanges are still closed in the first compliance mentality that requires submitting personal data.

Loud has been particularly careful since Coinbase data leakage, which she suspects was also affected. She is now considering changing the phone number that she got more than a decade ago, as Coinbase random messages suddenly flooded.

The breach has also extinguished concerns about the safety of the user, as data on the home addresses were included in the leakage. Founder of Techcrunch and Arrington Capital Michael Arrington He said On X that the information that has been leaked may endanger users.

magazine: Coinbase Hack shows that the law may not protect you: this is the reason