Canadian Crypto Exchange Coinsquare Confirms Data Breach

A Canadian cryptocurrency exchange Cryptocurrency Exchange A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f Read this Term, Coinsquare has become the latest victim of a security breach that has resulted in compromised users' personal details, the platform confirmed last weekend by sending an email to its customers.

The exchange detailed that the breach exposed "customer names, email addresses, residential addresses, phone numbers, dates of birth, device IDs, public wallet addresses, transaction history, and account balances."

However, the crypto exchange reported some "unusual activity on our platform" on November 19 and underwent unscheduled maintenance. Then, the exchange did not detail if it was a security breach. It also restored full service on Friday ahead of sending emails to costumes about the security breach.

Earlier this morning, we detected unusual activity on our platform and out of an abundance of caution, we decided to undergo an unscheduled maintenance period while we address this issue.

— Coinsquare (@Coinsquare) November 19, 2022

Digital Assets Are Safe

The email sent to the Coinsquare users highlighted that the security breach did not affect the passwords and held customers' digital assets.

"No passwords were exposed. We have no evidence any of this information was viewed by the bad actor," the email stated, adding: "We note that your assets have always been, and remain, secure in cold storage Cold Storage Cold storage is a computer system or mode of operation that is designed for the retention of inactive data, in this case private keys for cryptocurrencies. This helps put up resilient barriers against theft by hackers and malware, and is often a necessary security protocol especially dealing with large amounts of Bitcoin.In order to “own” a cryptocurrency, one must be in control of a cryptocurrency’s private keys. As such, private keys are long strings of random characters that can be used to se Cold storage is a computer system or mode of operation that is designed for the retention of inactive data, in this case private keys for cryptocurrencies. This helps put up resilient barriers against theft by hackers and malware, and is often a necessary security protocol especially dealing with large amounts of Bitcoin.In order to “own” a cryptocurrency, one must be in control of a cryptocurrency’s private keys. As such, private keys are long strings of random characters that can be used to se Read this Term and are not at risk."

We want to reiterate that 100% of client funds are safely held in cold storage and are not used for business activities

— Coinsquare (@Coinsquare) November 20, 2022

However, a breach of personal information can also result in more severe individual account targeting. These generally make identity theft and fraud much more accessible. A similar data breach of Australian telecom service provider Optus earlier this year prompted the country's financial market watchdog to warn financial brokers of the rising risks of identity theft.

Moreover, the Canadian exchange cautioned the users to change their passwords and enable two-factor authentication (2FA) to ensure safety.

Coinsquare touts itself to be "Canada's trusted platform to securely buy, sell and trade Bitcoin, Ethereum, and more" and received registration from the Investment Industry Regulatory Organization of Canada (IIROC) a month before.

The security incident with the exchange happened when the crypto industry was reeling from the effects of the FTX collapse. The initial "unscheduled maintenance" of Coinsquare raised speculation of possible liquidity issues. However, the confirmation of the security breach ruled out those concerns.

Earlier this month, now-collapsed cryptocurrency platform FTX was hacked, resulting in the theft of at least $1 billion worth of cryptocurrencies. The exchange and its other more than 130 affiliates have now filed for bankruptcy protection in the United States.