Liquid Data Leak

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Liquid

The Liquid exchange in Japan saw personal data on hundreds of thousands of customers leaked, after an attacked managed to modify some DNS settings to take hold of internal company email accounts. The leaked information includes customer KYC information.

This exchange or platform is based in Japan, or the incident targeted people primarily in Japan.

About Liquid

"Founded in 2014, Liquid is one of the world's largest cryptocurrency-fiat exchange platforms serving millions of customers worldwide." "Liquid’s mission is to build a secure and modern-day cryptocurrency ecosystem for traders and consumers to learn, grow, and leverage the benefits of financial freedom that blockchain technology enables."

"We are consistently ranked among the top 10 cryptocurrency exchanges globally based on daily traded spot volume with deep BTC/JPY liquidity. We are focused on providing a great user experience & world-class service levels." "Buy and sell Bitcoin, Ethereum, XRP and many other cryptocurrencies with fiat or crypto." "Trade our spot and margin markets with advanced funding options, lightning fast execution and deep liquidity." "We accept deposits of major fiat currencies including USD, JPY, EUR, SGD, HKD, and AUD."

"We manage digital assets using a combination of cold wallets & Multi-party computation (MPC) technology." "We use the latest technologies to keep your funds safe, and stay ahead of vulnerabilities and exploitation attempts." "Using multi-party computing we are able to offer fast round-the-clock withdrawals while maintaining our rigorous security standards."

"Mike Kayamori, CEO of cryptocurrency exchange Liquid, posted a notice on the official website that a data leakage security incident occurred on the exchange on November 13."

"The company blamed the intrusion on its domain name provider, which fell victim to a social engineering attack and incorrectly transferred Liquid's account to the hacker." "On the 13th of November 2020, a domain hosting provider "GoDaddy" that manages one of our core domain names incorrectly transferred control of the account and domain to a malicious actor."

"A domain hosting provider that manages a core domain name mistakenly transferred control of the account and domain name to a malicious intruder, allowing it to change DNS records, thereby controlling a large number of internal email accounts, and being able to partially damage the exchange’s Infrastructure and gain access to stored documents."

"After detecting the intruder, immediate action was taken to intercept and contain the attack to prevent further intrusions and reduce the risk of customer accounts and assets, while conducting a comprehensive review of the infrastructure."

"It can be confirmed that the customer's funds are safe, and the cold wallet based on MPC (Multi-Party Computing Protocol) is safe and has not been damaged."

"The relevant regulatory agencies have been notified of the intrusion and will continue to communicate in the next few days. The attacker may have obtained the user's email, name, address, and password. At present, Liquid is investigating whether the attacker has accessed the identity documents and photos submitted to KYC for verification, and will provide updates after the investigation."

"Liquid announced the final findings on January 20, 2021. Liquid stated that 169,782 items of user data including email addresses, names, encryption passwords, API keys, etc. have been leaked." "Stolen information included real name, home address, emails, and encrypted passwords." "Among them, the personal information that may be accessed illegally is the user who went through the KYC process before October 2018, such as the user's ID card, self-portrait picture, proof of address and other identity verification documents 28,639."

"We do not believe there is an immediate threat to your account due to our use of strong password encryption. Nevertheless, we recommend that all Liquid customers change their password and 2FA credentials at the earliest convenience," Kayamori said.

This exchange or platform is based in Japan, or the incident targeted people primarily in Japan.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Liquid Data Leak

Date	Event	Description
November 13th, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

No funds were lost.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.