Bitfinex CTO Dispels FUD, Refutes Data Breach By Ransomware Group

In an interesting turn of events, Bitfinex chief technology officer (CTO) Paolo Ardoino has dismissed rumors of the exchange being involved in a large-scale data breach. This came in response to claims of a significant security breach by the hacking group FSOCIETY a little over a week ago.

On April 26, FSOCIETY claimed on its dark web homepage that it had successfully breached the security measures and obtained sensitive data of several entities, including Bitfinex. Other organizations the group contacted include Rutgers University, SBCGlobal, and Coinmoma (likely a wrong spelling of the Coinmama crypto exchange).

FSOCIETY, in its messages to the supposed victims, gave an ultimatum of seven days for each organization to make a substantial payment to avoid the leak of sensitive data. Despite the one-week deadline elapsing, none of these establishments have confirmed a server breach or the payment of a ransom.

Bitfinex CTO Responds To Data Breach Rumors

On Saturday, May 4th, Bitfinex CTO Paolo Ardoino took to the X platform to share a message on a purported breach of the exchange’s servers and security. According to the CTO, the ransomware group never directly contacted the exchange about any data breach, as they only got to find out about the claim on Friday, May 3rd.

Everyone panicking for a potential database breach on bitfinex.
Tldr: seems fake.

The alleged hackers have posted 2 mega links with sample data contains 22.5k records of email and passwords.
– we don’t store plaintext passwords, nor 2FA secrets in clear text.
– only 5k of 22.5k…

— Paolo Ardoino 🍐 (@paoloardoino) May 4, 2024

Ardoino, who is also the CEO of Tether, mentioned that only 5,000 of the supposedly stolen 22,500 emails match that of Bitfinex customers. The exchange executive claims that hackers merely collected a database of emails/passwords from various crypto hacks.

Ardoino added in his post:

Most of users unfortunately use same email/passwords across multiple sites. We’re performing deep analysis of our systems and no breach was found currently. Also the KYC platform has heavy rate limiting that would disallow downloading in bulk.

While labeling the data breach rumors as pure FUD (fear, uncertainty, and doubt), the Bitfinex CTO reiterated that they will keep evaluating the situation to ensure that “no stone remains unturned.” Ardoino also assured the exchange users that all funds are safe.

Data Breach Claim Was A Marketing Strategy: Security Researcher

In a follow-up post on X, Paolo Ardoino revealed a message from an independent security researcher on the purported data breach incident. According to the unnamed investigator, the FSOCIETY’s claim of the data breach was a ruse to market their ransomware products.

Source: Paolo Ardoino/X

The researcher’s message read:

I believe I start to understand what is happening and why they are sending these messages claiming you were hacked. The message in the screenshot in the ticket came from a TG channel (not reporting here to avoid helping them with free advertisement). There it seems they are selling the tool used that supposedly was used to hack Bitfinex and Rutgers.

With this revelation, Ardoino questioned the credibility of their claims of hacking different organizations. “If they truly hacked Bitfinex, do they really need selling stuff for 299$?,” the CTO said.

Total cryptocurrency market capitalization at $2.271 trillion on the daily timeframe | Source: TOTAL chart on TradingView

Featured image from Bitfinex, chart from TradingView