Cryptocurrency Exchanges Hacked in Brazil

Reportedly, the biggest exchanges of Brazil suffered a massive hack that impacted 264,000 separate user accounts. Hackers stole a lot of info related to the emails associated, along with the phone numbers of the concerned users.

Brazilian Exchanges Hacked

The exchanges were hacked last week when crucial data of more than 264,000 users were exposed. The issue came into light when Digital Investment, a YouTube channel, broke the story. The channel revealed that the most significant violations happened on the Atlas Brazilian Exchange where data of more than 15,000 users was compromised.

Atlas released a Facebook statement following the event and said:

“We became aware early on Saturday night that a security incident involving the leakage of data from our customers occurred. We are conducting an investigation with our information security advisor to understand the incident in more detail and will cooperate with the appropriate authorities.”

Money laundering questionnaire

Needless to say, this is a massive security breach and could have everlasting impacts overall. As it seems, the Brazilian government wasn’t satisfied with the responses provided on Facebook after the massive hack.  They have subpoenaed the exchanges to get more information related to the attack and to spell out compliance, money laundering, and crypto regulation issues.

The subpoena came in the form of a fourteen-question document which is seen as the key to providing enough information to help the government in finding the people responsible for this theft of data.

How legal is it?

However, it is not clear as to what kind of punishment would violators face if they fail to provide responses within the stipulated time limit. The questionnaire inquires the exchanges about the compliance rules, cash deposit and withdrawal limits, as well as what measures have they taken to mitigate risks related to terrorist financing and money laundering.

The Brazilian publication, Portal do Bitcoin, obtained access to the document which read:

“Dear Sirs, in order to subsidize a study to Combat Corruption and Money Laundering, and following the FATF Recommendations to protect the integrity of the financial system, the Attorney of the National Treasury, in its role of Tax Administration, informs the following taxpayer to present the following answers.”

According to the same website, three of the major crypto exchanges have spoken out. One says that they have answered the questionnaire, the second claims not to have received it and the third one has stated the subpoena isn’t legal, therefore, they won’t answer it.

The Final Word

The hacks in Brazil have shown the “dark” side of cryptos, subject to hacks. However, the government’s attempt to understand what happened and how the exchange and the money hacked was used, can be an indication of two positions. The government can be investigating to gather information and create regulations, or it may be preparing a harsher stance towards cryptocurrencies. In any case, the exchanges were probably scrambling to make their platform more secure and steered away from public eyes.