For those who aren't in the know when it comes to BlockFi. They are a custodial platform whereby users can store their cryptocurrency and receive interest on crypto-assets, as well as borrow against crypto on the platform to achieve favorable interest rates. I've been researching them lately because they offer a staggering 8% interest on crypto you store with them, compounding monthly. That is a great deal! And given my interest in earning as much as possible for as little work as possible, I was intrigued. But it does come with risks! The classic "not your keys, not your coins" crypto sentiment applies. There is inherent risk with giving anyone your crypto as you may never receive it back.
At first glance BlockFi seems very safe when compared to other similar platforms, or exchanges. They are backed by Gemini who holds the assets stored on BlockFi. Gemini is a reputable exchange owned by Cameron and Tyler Winklevoss.
These guys look trustworthy, right? Well I'm sure they are! But despite all the hair gel money can buy, recently BlockFi had a significant security breach. No customer funds were compromised thank goodness, but a lot of customer personal data was. I had planned on writing a review of BlockFi and still do, but with this data breach came the need to bring some information to the attention of my readers in a timely manner.
Generally when these types of events occur there are two very big pieces of information that need to be found out
1) What exactly happened. And,
2) What exactly is BlockFi doing about it?
What happened is that an "unauthorized third party" gained access to their system in an attempt to withdraw funds. But only managed to escape with the Name, Email Address, Date of Birth, Postal Address, Activity History, Phone Number, as well as User's Current Account Balances, and Pending Withdrawals of all users.
Wow that is a mouthful. This third party managed to gain a ridiculous amount of information! Definitely enough to target individuals for further actions. Once you know someone's name, address, phone number and account balance you could certainly make an informed decision on who is vulnerable!
Honestly, there isn't much more to say on this and others have probably written better articles about the actual data breach incident so I'm going to leave delving deeper to others. But I play the role of the concerned customer! So what next? What is BlockFi doing about this data breach? They've gone and put large targets on the backs of countless users so surely there must be some kind of compensation?
If you email BlockFi about the data breach you will receive a form letter just as I have. If you don't want to don't worry about reading the whole thing. Most of it I've already written out here.
I'm going to let you know exactly what I found wrong with the email. They are offering compensation for clients in the form of $25, only IF you go to them and ask for it. I understand the business side here. Obviously it's much cheaper to offer compensation to the squeaky wheels rather than universally applying it to all users. You're going to save your company a ridiculous amount of money! However that's not the right thing to do and I think BlockFi deserves to be called out on this behavior. Every user on the platform had the same information taken, and to every user that information is valuable. Yes the target painted on some backs may be larger than others, but that doesn't mean BlockFi should get to pick and choose. They're simply relying on most users to either not notice that the breach occured, or not care.
I will be writing a full review of BlockFi in the future at some point. I'm still uncertain of the overall tone of it, but I felt like this incident deserved to be highlighted. What do you guys think? Am I being ungrateful? Should I walk away happy with my $25, or does BlockFi deserve to be called out?
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