Binance Ordered to Freeze Attackers' AccountsLondon High Court's Decision Comes After Fetch.ai's Binance Accounts Accessed
The London High Court has ordered the cryptocurrency exchange Binance to attempt to identify and freeze accounts belonging to the attackers who allegedly stole about $2.6 million from Fetch.ai.
The court made its decision in response to a suit brought by the U.K.-based artificial intelligence firm Fetch.ai against Binance, claiming that on June 6, attackers had entered the exchange's system, accessed Fetch.ai accounts and sold off $2.6 million worth of its holdings.
In a statement provided to Information Security Media Group, Binance says it already has a policy to do as the court requests.
"Binance routinely freezes accounts that are identified as having suspicious activity occurring in line with our security policies and commitment to ensuring that users are protected while using our platform," a company spokesman says.
The exchange says it's working with Fetch.ai to recover its lost assets.
The court ruled that Binance must freeze the assets that were removed from Fetch.ai's account to the extent they remain identifiable in the recipient account and/or to restrain the third parties in possession of the traceable proceeds from dealing with them as if they were their own.
Fetch.ai did not immediately respond to a request for comment.
The London High Court says that on June 6, unknown persons apparently inappropriately obtained access to Fetch.ai's accounts that were maintained with Binance. These accounts held various cryptocurrency types, including USDT - a cryptocurrency tied to the value of the dollar, Binance Coin, and bitcoin, among others.
"The way in which these particular accounts are operated is, in effect, as trading accounts so that it is possible to buy and sell cryptocurrencies using the accounts concerned with counterparties who at all material times remain blind to the person operating the account in the position of the first applicant," the according to court documents.
The court says the attackers allegedly gained access to the Fetch.ai accounts and the ability to trade whatever currency was held in those accounts. The attackers then sold the cryptocurrency at a massively reduced price.
"In the aggregate, losses totaling in excess of $2.6 million were sustained over a very short period by the simple expedient of trading assets belonging to the first claimant at massive undervalues, moving the assets out of the accounts of the claimant to third-party accounts (inferentially operated by or on behalf of those carrying out the fraud) with the result that significant loss in the sum ... has been inflicted upon the claimant," the court document says.
Another Cryptocurrency Exchange Incident
In another recent cryptocurrency incident, a breach of Poly Network led to the theft of $612 million. But the attacker has since returned a large percentage of what was stolen. Binance was listed as one of three blockchains receiving the stolen cryptocurrency.
The attacker may have had difficulty laundering such a large sum of money, prompting them to return their ill-gotten gains, says Dr. Tom Robinson, co-founder and chief scientist at the blockchain analysis firm Elliptic.
Elliptic on Friday reported finding a blockchain analytics tool on the darknet that allows crypto launderers to test whether their funds will be identified as proceeds of crime by regulated exchanges, Robinson said.