Crypto hacks and scams continue to be on the rise, despite several measures being adopted by Blockchain technologies and crypto exchanges, as the activities of the perpetrators continue to tarnish the image of the booming Blockchain space. The Blockchain space has continued to grow in numbers, and unfortunately, the number of crypto scams has followed the same trajectory. However, the actions of these scammers do not exempt crypto exchanges, who, unfortunately, play a role in the whole scenario. A look at the case of the clients of AA and Bitfinex further shows that crypto exchanges need to do better.
The case of AA and Bitfinex
Around October 2019, some crypto hackers hacked the system of AA clients- an insurance company based in Canada. The hackers have managed to install an encrypting data service that threatened the business operations and existence of the Canadian investment firm. The hacker then proceeds to demand a $1.2 million ransom in Bitcoin, as things started to get messy. Unfortunately, AA happens to be the insurer of the Canadian company and is obliged to help the firm restore order in times of chaos.
AA had to fork out $1.2 million worth of Bitcoin from their purse as things restored to normalcy in quick succession. However, AA has now moved ahead to inquire about the services of Chainalysis to help them investigate the whole incident. The conclusions of the investigation have now revealed that 95% of the Bitcoin which AA paid the hackers was linked to a wallet on a popular crypto exchange- Bitfinex, much to the dismay of AA. Unfortunately, AA has now started litigation against Bitfinex, requesting the crypto exchange to uncover the identity of the anonymous scammers. The case has now continued to drag for more than a year, as AA believes that Bitfinex can uncover the culprit.
Is it worth it?
The 14-month old legal battle between AA and Bitfinex is dismissed by a UK court that believes that Bitfinex has no allegiance to AA. Unfortunately for AA, one of the reasons why they have been unable to get a hold of the case is because they started the proceedings late. According to the report by Bitfinex, the hackers had moved the Bitcoin in the wallet before they were able to place any restraining order on the account used to perpetrate the fraudulent act.
However, the case has continued to linger, as Bitfinex has subsequently frozen the hacker’s account and provided AA with every necessary information in its possession to help them track the scammer, as obliged by the court. Unfortunately, crypto analysts believe that, while it is tempting to drag the crypto exchange over fraudulent activities perpetrated by their account holders, hoping to get some form of settlement, it is always not rewarding. AA has continued to spend huge funds on investigations and trials, hoping that they will get some form of settlement from Bitfinex, and unfortunately, that has not been the case, as it appears that the matter is far from a conclusion.