London High Court orders Binance to help trace $2.6m stolen in hack
The world’s largest cryptocurrency exchange has been ordered
by London’s High Court to help identify and freeze the accounts of hackers
responsible for a $2.6 million heist.
A judge granted the request of AI company Fetch.ai for
Binance to take necessary action to help identify the perpetrators and locate
and seize the stolen assets.
It marks Binance’s first public involvement with a case of
this nature and could become a measure of the efforts of the court system’s
attempts to tackle fraud and theft on cryptocurrency exchanges.
Previously, Binance noted it was committed to complying with
appropriate local rules wherever it operates and would expand its international
compliance teams to work closely with local regulators.
Binance said it was keen to cooperate with the case.
“We can confirm that we are helping Fetch.ai in the recovery
of assets,” a spokesperson said.
“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.”
Fetch.ai is both incorporated in England and Singapore and
builds and develops blockchain-based AI projects.
Perpetrators
Fetch claims the perpetrators hacked their way into its
cryptocurrency accounts on Binance on June 6. Account restrictions meant the
hackers were unable to remove the funds. Instead, the assets were allegedly
sold to a linked third party at a fraction of their value within an hour of the
hack taking place.
Syedur Rahman, a partner at the law firm Rahman Ravelli –
representing Fetch.ai – said Binance had notified Fetch.AI of unusual activity
in its account and had already frozen funds. Binance indicated it would comply
with the orders.
For the claim to be successful, Fetch.ai must prove it was a
victim of fraud on Binance before being able to seek a recovery order.
Binance has been under the spotlight of global regulators in
recent months, complying with a number of orders made for it to restrict
certain services in selected territories. Recently, Binance halted derivatives
trading in both Hong Kong and Europe alongside reducing leveraged trading
limits to 20x and removing stock tokens from the platform.
The recent resignation of Brian Brooks from his position as
CEO of Binance US also prompted a response from the wider crypto community,
with concerns being flagged that the regulation being imposed on Binance was
affecting certain “strategic decisions” from being made and halting Binance’s
progress towards becoming a better-regulated exchange.
Binance CEO Changpeng Zhao (CZ) aimed to dispel any
circulating rumours by confirming that Binance was seeking a more reactive
approach to compliance and advised followers to “stay tuned”, suggesting that
Binance had possibly made some headway in their ongoing battle with global
regulators.
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