UK High Court Orders Binance to Investigate $2.6M Hack

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In Brief
  • Cambridge-based AI company Fetch.ai requested Binance to identify and track hackers, as well as freeze their accounts.

  • Fraudsters reportedly hacked into Fetch.ai's cryptocurrency accounts in June, selling assets off to a third party.

  • Binance has indicated they are complying with the court's order.

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Leading cryptocurrency exchange Binance has received orders from the UK High Court to take steps against hackers who reportedly stole $2.6 million worth of crypto.

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According to reports, Fetch.ai, an artificial intelligence lab based in Cambridge, requested that Binance identify and track fraudsters who hacked into their cryptocurrency accounts back on June 6. 

Account restrictions prevented the hackers from removing the assets in question. As a result, they reportedly sold those assets to a third party in the space of an hour. 

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The company also requested Binance freeze the hackers’ accounts on the exchange. A High Court judge subsequently granted Fetch.ai’s requests.

Binance has indicated that they will comply with the court’s orders, according to reports. However, the claimants will not be able to seek a recovery order until they prove they have been victims of fraud.

Binance faces continued scrutiny

This court order comes amid a turbulent period for Binance. The exchange has recently come under a lot of scrutiny from institutions across the world. A number of countries, including the UK, have warned users against Binance, while others have enforced outright bans.

At the beginning of July, two leading British banks restricted customer access to Binance. First, Barclays called a halt to transfers of customer funds to the exchange. Then Santander UK blocked payments to Binance altogether a couple of days later.

Both institutions’ actions were responses to a consumer warning, issued by the UK’s financial regulator, the Financial Conduct Authority (FCA). The regulatory body maintained that Binance was not authorized to conduct cryptocurrency business within the UK. Italian regulators issued a similar warning later in July.

Shortly after these banks’ decisions, Binance suspended Pounds Sterling (GBP), the UK’s official currency, as a withdrawal option on the exchange.

Binance has also faced internal issues recently. Two high-ranking executives resigning from their respective branches of the exchange in the space of a month. Most recently, Brian Brooks, who used to be a top U.S. banking regulator, stepped down as CEO of Binance.US. He had only served in the role for three months. 

In a resignation statement on Twitter, Mr Brooks cited “differences over strategic direction” but also wished success for his former colleagues.

His departure came three weeks after that of Ricardo Da Ros, who resigned from his position as director of Binance Brazil back in July. Mr Da Ros had also only been in the job a few months prior to his resignation. 

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Dale Hurst is a journalist, presenter, and novelist. Before joining the Be In Crypto team, he was an editor and senior journalist at a news, lifestyle and human-interest magazine in the UK. Cryptocurrency was one of the first subjects he specialized in when first going freelance in 2018, reviewing exchanges and analysing lawsuits.

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