Crypto-Trading Platform ‘Liquid’ Announced Catastrophic Data Breach

Written by Bill Toulas
Last updated September 17, 2021

The CEO and co-founder of the crypto-trading platform ‘Liquid’ posted a blog piece on the official website, informing the community about an unfortunate security incident that resulted in a severe data breach.

The incident occurred on November 13, 2020, when a domain name hosting provider contracted by Liquid incorrectly transferred the domain account managing the main website to a malicious actor. The third-part then proceeded to change DNS records and take control of several internal email accounts, partially compromising the platform’s infrastructure and exfiltrating sensitive documents.

Liquid detected the intruder soon enough, as they claim, and managed to somewhat contain the attack. It took them a few days to report this incident to the users because they wanted to understand exactly what happened before they rushed to any announcements. As the platform can now declare with absolute certainty, no user funds have been compromised, and no crypto wallets of any type (MPC or cold) have been accessed.

The actor managed to access user data, though, so this is where the risks stem from. That would include the following information:

The infiltrator has possibly also accessed the documents that the users uploaded on Liquid upon creating their account and validating their identity, but this hasn’t been confirmed yet. These documents are typically selfies, national ID cards, proof of address in the form of a utility bill, etc.

The risks that come with this event include identity theft, phishing attempts, scamming messages, and more. Thus, you are advised to remain vigilant, treat all incoming communications with suspicion, and keep an eye on your credit reports.

Also, and even though the passwords were encrypted, you are advised to reset it anyway. If you’re unable to do that for any reason, you should contact “[email protected]” immediately.

Liquid is not directly liable for what happened, as the breach happened on the domain name hosting provider level. However, it is the crypto-trading platform that’s called to carry the weight of the consequences now, and its users are forced to deal with the associated risks. Thus, if you are a Liquid user, you can at least maintain a stance of understanding and patience towards Liquid instead of bashing them about the hapless occurrence.

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