Security Breach leads to Unauthorised

Peer to peer trading platform LocalBitcoins has been the target of a hack, and some accounts on the platform have recorded unauthorized transactions, according to a statement by the company. Hacks have been a hazard in the crypto industry for a long time, and this is the latest in a long line of such security breaches related to trading platforms. However, the hack at LocalBitcoins does not seem to be particularly damaging since only 6 accounts have been affected so far and according to the company’s statement, the source of the breach is a third-party software application that is responsible for a particular feature of the site.

The security breach happened on the 26th of January at around 10 UTC. LocalBitcoins described the issue in their statement- “Outgoing transactions were temporarily disabled while we investigated the case. We were able to identify the problem, which was related to a feature powered by third party software, and stop the attack. At the moment, we are determining the correct number of users affected – so far six cases have been confirmed. For security reasons, the forum feature has been disabled until further notice.”

LocalBitcoins and similar peer to peer trading platforms do not operate in the same way as traditional trading platforms. In case of such platforms, buyers and sellers agree on a price and then settle their trades primarily through bank transfers. Hence, users do not actually need to keep their coins in the wallets in LocalBitcoins.

However, what makes this security breach a bit of a problem for LocalBitcoins is that sellers may often need to use the ‘internal wallet’ in the platform to avail of the escrow services. This kind of a security breach can certainly put off potential customers. That being said, there have been no reports that any actual wallets have been compromised.

Security breaches and hacks have been a permanent problem in the cryptocurrency space for a long time now. According to many experts, third-party services on trading platforms are particularly prone to these attacks. LocalBitcoins does recommend that all the users on the platform user 2-factor authentication to avoid any security threats. Ultimately, the users need to be very through with the security protocols so that their accounts are never compromised. The company has not come up with any more updates regarding the security breach.

Leave a Reply