The Dutch Bitcoin broker suffered its second data breach in six weeks, prompting people to question the security of information held by Bitcoin brokers.
Litebit, a Bitcoin broker based in the Netherlands, has fallen victim to a data breach attack. This is the second time in six weeks that Litebit has reported a data breach. Initial reports reveal that the attack vector was similar to the one used in the previous attack.
Litebit is a Bitcoin broker. It is a platform where people can buy or sell Bitcoins. While most people prefer Bitcoin exchanges over brokers, there are certain advantages in using a broker service that is fast making them popular. For example, users have to wait for a matching offer in an exchange service before trade of Bitcoins can happen. This is not the case in broker services, where Bitcoins are exchanged at fixed prices.
Litebit has revealed that information like blackened email addresses and hashed passwords were stolen in the most recent data breach. The IBAN information of users was stolen as well. While people know that cracking and using this information requires considerable work on behalf of the hackers, the data breach is a big reason to worry. The fact that Bitcoin exchanges and brokers have personal information like names, emails, and payment details, it is important that this information is kept away from malicious users. Oftentimes, the broker or exchange shares this information with third-parties, but even when that’s not the case, this information is vulnerable to data breaches.
Litebit suffered a similar data breach a month ago, where user information was stolen. As with that time, there was no loss of funds reported in the September 12 data breach. While this gives some respite to the Bitcoin broker from Netherlands, it’s quite clear that their security needs a complete revision. Ensuring that customers’ personal information is protected is paramount, and these two attacks in quick succession show that Litebit is not doing this as it should.
The Dutch based broker did report the data breach on its own, which is something that doesn’t usually happen. It filed a report with the Dutch Police as well as the local Data Protection Authority. An in-depth investigation is underway while we wait to learn more about the incident and the extent of damage. Litebit, in an attempt to put a lid on things and secure their existing customers, has asked them to change their passwords.
This is a common strategy that companies use when victimized by data breach attacks, but it’s better than doing nothing. Moreover, they’ve asked their users to change their two-factor authentication settings as well. Two-factor authentication is a security mechanism people should use to secure all accounts. While its need in the case of using financial services like Bitcoin brokers and exchanges is greater, people should always use it to protect their personal information and accounts.
While we wait to learn more about the second data breach attack in six weeks against Litebit, it’s fair to assume that Litebit’s reputation as a Bitcoin broker will suffer a great blow after this announcement. Litebit is a broker service that all European Bitcoin enthusiasts know about. It’s one of the biggest and most popular Bitcoin brokers in the world. But when services of this stature suffer data breach attacks on a regular basis, users are bound to get paranoid about the security of their data. It’s simple to understand that once a malicious person has access to your personal data, he or she could create havoc in your life.
No loss of funds was reported in the September 12 data breach against Litebit, but the Dutch Bitcoin broker needs to revamp its security systems to ensure that this does not happen again. Its reputation might be strong to maintain a good customer base after two quick data breaches, but should a third breach occur, there’s no telling if it could pick itself up.