Voyager Digital Faces Data Breach Concerns Amidst Fund Recovery Efforts

Voyager Digital Faces Data Breach Concerns Amidst Fund Recovery Efforts

The bankrupt crypto firm Voyager Digital has been hit with potential data breach concerns as it allowed customers to recover their funds in June, according to a report by Bloomberg on August 1st. The decision to reopen the platform for 30 days and enable fund withdrawals came after customers’ assets were stuck in the brokerage following its collapse the previous year.

Scammers Target Customers With Potentially Stolen Data

A court document filed on July 28th reveals that Voyager’s lawyers are currently investigating reports of scammers targeting customers using potentially stolen personal information. The breach has raised alarm bells, with the culprits employing counterfeit websites to lure in unsuspecting customers with promises of larger payouts. Once the customer links their wallet to the fraudulent site, their funds are drained by the attackers.

Recovery Window Allows for Significant Asset Withdrawals

During the 30-day recovery window, customers were able to withdraw approximately $490 million worth of assets, which accounted for nearly 80% of the available funds in the brokerage. This move came as a glimmer of hope for the affected customers, but it has unfortunately also attracted the attention of malicious actors seeking to exploit the situation.

Judge Expresses Disapproval of Scammers’ Actions

US Bankruptcy Judge Michael Wiles expressed his disapproval during a court hearing held by telephone. He condemned the scammers’ actions, emphasizing the difficulties and challenges that customers have already faced due to Voyager’s collapse. The potential data breach and subsequent phishing attempts further compounded the distress experienced by the victims.

Voyager’s Debt and Accessible Funds

Voyager Digital officials had estimated that customers could potentially recover around 36% of what they were owed, and even more than 60% if the company succeeded in a court battle with another bankrupt crypto firm, FTX Trading. According to court documents, Voyager owed approximately $1.8 billion, but only had about $630 million of accessible funds at that time.

Conclusion

As Voyager Digital navigates its bankruptcy proceedings and attempts to assist customers in recovering their funds, the potential data breach and scams targeting customers have added significant complications to an already challenging situation. The vulnerabilities exposed during the fund recovery process underscore the need for heightened security measures and greater vigilance in the cryptocurrency industry. As authorities investigate the breach and the affected customers seek restitution, the entire crypto community will be closely watching the developments to ensure that such incidents are prevented in the future.