Binance and Kraken Reportedly Fend Off Social Engineering Hack

Binance and Kraken were reportedly targeted in a social engineering cyberattack.

As Bloomberg News reported Friday (May 16), the hacking attempts were similar to the one revealed last week by fellow cryptocurrency exchange Coinbase.

Sources told Bloomberg both Binance and Kraken were able to repel the attacks without customer data being compromised. PYMNTS has contacted both companies for comment but has not yet gotten a reply.

The report noted that crypto firms have recently seen an increase in attacks as the value of digital assets such as bitcoin has climbed. Earlier this year, the Bybit exchange suffered a historic $1.5 billion cyberattack.

It was the largest such theft on record, causing a 303% surge in cryptocurrency thefts during the first quarter of the year.

Then on Thursday (May 15), Coinbase disclosed that it was dealing with a data breach that had transformed into an attempt at extortion. The breach occurred when cybercriminals convinced “a small group” of company insiders to copy the data from its customer support tools for less than 1% of Coinbase’s monthly transacting users, the company said on its blog.

“Their aim was to gather a customer list they could contact while pretending to be Coinbase — tricking people into handing over their crypto,” Coinbase said. “They then tried to extort Coinbase for $20 million to cover this up. We said no.”

Coinbase fired the compromised employees “on the spot” and referred them to law enforcement authorities, with plans to press charges.

The company has said it will reimburse customers who were tricked into sending funds to criminals. In a Securities and Exchange Commission (SEC) filing Friday, Coinbase projected the incident could cost it up to $400 million.

Bloomberg’s sources said that Binance and Kraken were targeted in a fashion similar to Coinbase, though their in-house policies and technologies prevented the attacks. Binance had seen scammers contacting its customer-service agents with bribery offers, offering a Telegram handle to contact the culprit.

Social engineering fraud has jumped by 56% in the past year, per to the PYMNTS Intelligence report, “The State of Fraud and Financial Crime in the U.S. 2024: What FIs Need to Know.”

The report found that fraudsters are employing advanced social engineering scams to target consumers directly, leveraging fear, urgency, and even fake customer service lines to trick victims into turning over sensitive information.