what can you do if your kyc-linked crypto wallet gets hacked?

[lokamira]

Hi everyone, I lately been thinking about a worst-case scenario of the following situation: If a crypto wallet that’s linked to your KYC identity (like one tied to a KYC exchange) gets hacked and you lose for example your phrases, what can you actually do about it? Even if there’s no money in it, a hacker could still use it for sketchy stuff, and because it’s linked to your verified identity, that could come back to you.
Is there any way to prove that the wallet is no longer under your control? Can you flag it or disconnect it some how ?

[Z-tight]

Hi everyone, I lately been thinking about a worst-case scenario of the following situation: If a crypto wallet that’s linked to your KYC identity (like one tied to a KYC exchange) gets hacked and you lose for example your phrases,

You don't have any seed phrase in a centralized exchange wallet, the exchange controls everything, that's why it is called a custodial wallet, and a strong reason why you should not store your funds in it for a long time.

If you notice your exchange wallet is hacked and the hacker is yet to change your password, then you should immediately change it, set up 2fa and other security measures. If the hacker is yet to withdraw all your funds, then you should either withdraw it to a different wallet, or disable withdrawal on your account if you have such feature available. Finally, inform the exchange as soon as possible and follow their instructions.

[avikz]

Hi everyone, I lately been thinking about a worst-case scenario of the following situation: If a crypto wallet that’s linked to your KYC identity (like one tied to a KYC exchange) gets hacked and you lose for example your phrases, what can you actually do about it? Even if there’s no money in it, a hacker could still use it for sketchy stuff, and because it’s linked to your verified identity, that could come back to you.
Is there any way to prove that the wallet is no longer under your control? Can you flag it or disconnect it some how ?

If the wallet is hacked and there's no money, you just need to let the exchange know about that incident from your registered email address. The exchange can then freeze your account from being used or give you back access if you are able to prove the ownership.

If an account is hacked, I don't think the hacker will have access to your data files. These are usually centrally controlled by the exchange. Unless the entire exchange data is hacked, nothing much to worry about.

[Z-tight]

Unless the entire exchange data is hacked, nothing much to worry about.

Nothing to worry about? Tell that to people who have been victims of phishing attacks because one exchange or service experienced a data breach, and now their personal information is out in the dark web. Or Ledger customers that have been constantly harassed by phishing links for years now, because ledger's entire database was hacked. There is definitely something to worry about if your personal information is in public.

[zasad@]

Hi everyone, I lately been thinking about a worst-case scenario of the following situation: If a crypto wallet that’s linked to your KYC identity (like one tied to a KYC exchange) gets hacked and you lose for example your phrases, what can you actually do about it? Even if there’s no money in it, a hacker could still use it for sketchy stuff, and because it’s linked to your verified identity, that could come back to you.
Is there any way to prove that the wallet is no longer under your control? Can you flag it or disconnect it some how ?

If there is a hack of the exchange, then you have nothing to worry about, even if the hacker uses coins for dubious purposes.
Usually hackers will cover their tracks through mixers and other similar services.

If suddenly someone gets access to your non-custodial wallet with KYC, then it is better to report it to the police.
But most people use non-custodial wallets without KYC, so you may be asked questions if you have not declared cryptocurrencies or cryptocurrencies are prohibited in your country.

[avikz]

Unless the entire exchange data is hacked, nothing much to worry about.

Nothing to worry about? Tell that to people who have been victims of phishing attacks because one exchange or service experienced a data breach, and now their personal information is out in the dark web. Or Ledger customers that have been constantly harassed by phishing links for years now, because ledger's entire database was hacked. There is definitely something to worry about if your personal information is in public.

Oh yes, I didn't thought about that aspect. It's true! If the public information is available in the public domain it is a matter of concern.

I am very restrictive while it comes to KYC and that's why I didn't choose to claim my Pi tokens while I had a quite a significant amount as per today's conversion rate. I let go almost a thousand dollars just because I didn't want to do KYC with some unknown international entity.

Sorry, I really didn't thought through this!

[Z-tight]

If suddenly someone gets access to your non-custodial wallet with KYC, then it is better to report it to the police.

I don't use any kyc self custodial wallet, i don't even think i know of any. However, if someone compromises your self custodial wallet, i don't see the need of going to the police, your funds are surely going, so you should create a new wallet and secure that better. Finally, i don't even think anyone should use any self custodial kyc wallet.

I let go almost a thousand dollars just because I didn't want to do KYC with some unknown international entity.

Yeah. Kyc can be dangerous.

[TravelMug]

Hi everyone, I lately been thinking about a worst-case scenario of the following situation: If a crypto wallet that’s linked to your KYC identity (like one tied to a KYC exchange) gets hacked and you lose for example your phrases, what can you actually do about it? Even if there’s no money in it, a hacker could still use it for sketchy stuff, and because it’s linked to your verified identity, that could come back to you.
Is there any way to prove that the wallet is no longer under your control? Can you flag it or disconnect it some how ?

We are still in the gray area though. If we can compare it in real life, it's like your credit card was stolen. But then you can report it to the police. Here in crypto, I don't know if there is some authorities that you can report that your wallet is stolen specially our KYC documents. That is the most important thing, because we all know that if the cyber criminals can get a hold of your personal info, they can used it at their disposal, or even sell it in the dark market. And how many times that we heard about this kind of case? that suddenly a person supposedly committed a crime without his/her knowledge. Maybe you can report it locally to your police, at least some documents that can proved that your information was stolen so that if something worst happen to you, you will have this proof that you didn't do anything and that your data was stolen online.

[Z-tight]

Here in crypto, I don't know if there is some authorities that you can report that your wallet is stolen specially our KYC documents. That is the most important thing, because we all know that if the cyber criminals can get a hold of your personal info, they can used it at their disposal, or even sell it in the dark market.

When you submit kyc in any custodial service, it is that service that holds the kyc information and if anyone is going to lose it, it is the service and if they do, which they have on many occasions, it will be recorded that there was a data breach and the customers whose data has been exposed.

In my opinion, such people should be more worried about phishing attacks and also physical attacks, which are more common in cases like this, rather than getting arrested for a crime they didn't commit.

[zasad@]

If suddenly someone gets access to your non-custodial wallet with KYC, then it is better to report it to the police.

I don't use any kyc self custodial wallet, i don't even think i know of any. However, if someone compromises your self custodial wallet, i don't see the need of going to the police, your funds are surely going, so you should create a new wallet and secure that better. Finally, i don't even think anyone should use any self custodial kyc wallet.

For example, you can use the Ledger service to save the seed phrase, and there you need the kyc procedure.

But that's not the problem. In some countries, citizens are required to declare their wallets to the tax office. If the wallet is declared and the coins are stolen, you must definitely write a statement to the police in order to submit the correct tax return.

[Z-tight]

For example, you can use the Ledger service to save the seed phrase, and there you need the kyc procedure.

I believe you are talking about the Ledger recover service, which is an optional and also a paid service, yeah it requires ID verification, but it is also an opt-in service, and i don't even recommend anyone to pay for such a service that puts their funds at risk.

But that's not the problem. In some countries, citizens are required to declare their wallets to the tax office. If the wallet is declared and the coins are stolen, you must definitely write a statement to the police in order to submit the correct tax return.

Okay, that is a valid point to report to the authorities. My point is that nobody should be using any kyc self custodial wallet, it is risky enough to submit kyc in custodial and centralized platforms.

[zasad@]

But that's not the problem. In some countries, citizens are required to declare their wallets to the tax office. If the wallet is declared and the coins are stolen, you must definitely write a statement to the police in order to submit the correct tax return.

Okay, that is a valid point to report to the authorities. My point is that nobody should be using any kyc self custodial wallet, it is risky enough to submit kyc in custodial and centralized platforms.

I have said this many times myself, but unfortunately you need to be a good specialist to be able to trade decentralized and not use centralized dumps. Of my friends, everyone uses centralized services. I tried to teach some, but they do not understand that they can easily lose coins if they accidentally sign a permit from a scammer.

[TravelMug]

Here in crypto, I don't know if there is some authorities that you can report that your wallet is stolen specially our KYC documents. That is the most important thing, because we all know that if the cyber criminals can get a hold of your personal info, they can used it at their disposal, or even sell it in the dark market.

When you submit kyc in any custodial service, it is that service that holds the kyc information and if anyone is going to lose it, it is the service and if they do, which they have on many occasions, it will be recorded that there was a data breach and the customers whose data has been exposed.

In my opinion, such people should be more worried about phishing attacks and also physical attacks, which are more common in cases like this, rather than getting arrested for a crime they didn't commit.

Of course, being a 3rd party service provider they will have to be very careful on how they handle this KYC documents. We've seen a lot of news already like the 2022 Celcius case,

https://cryptoslate.com/horrendous-kyc-risks-on-show-as-website-detailing-celsius-users-losses-goes-live/

And as far as data breaches goes, I have a similar experienced, way back even before the advent of Bitcoin. My data was stolen and I was surprised that I buy outside of my country and they uses my credit card, this is early 2000's so from that time, I'm really very careful of providing my personal information because of such experience and for sure I'm not just the only one that might like a bad dream or nightmare in incident like that.

[Z-tight]

Of course, being a 3rd party service provider they will have to be very careful on how they handle this KYC documents.

Yeah they should be investing more in security, both in funds and data, but many of them don't do that; that is why there are so many events of data breaches and hacks were people lose their money.

I'm really very careful of providing my personal information because of such experience and for sure I'm not just the only one that might like a bad dream or nightmare in incident like that.

Everyone should be worried about kyc, because of how dangerous it is, but sadly only a few people are.

[zasad@]

Here in crypto, I don't know if there is some authorities that you can report that your wallet is stolen specially our KYC documents. That is the most important thing, because we all know that if the cyber criminals can get a hold of your personal info, they can used it at their disposal, or even sell it in the dark market.

When you submit kyc in any custodial service, it is that service that holds the kyc information and if anyone is going to lose it, it is the service and if they do, which they have on many occasions, it will be recorded that there was a data breach and the customers whose data has been exposed.

In my opinion, such people should be more worried about phishing attacks and also physical attacks, which are more common in cases like this, rather than getting arrested for a crime they didn't commit.

Of course, being a 3rd party service provider they will have to be very careful on how they handle this KYC documents. We've seen a lot of news already like the 2022 Celcius case,

https://cryptoslate.com/horrendous-kyc-risks-on-show-as-website-detailing-celsius-users-losses-goes-live/

And as far as data breaches goes, I have a similar experienced, way back even before the advent of Bitcoin. My data was stolen and I was surprised that I buy outside of my country and they uses my credit card, this is early 2000's so from that time, I'm really very careful of providing my personal information because of such experience and for sure I'm not just the only one that might like a bad dream or nightmare in incident like that.

In Russia, the data of most Russians has been stolen several times. I found my data, not only my passport, but also insurance numbers, cars, and other data that could only have disappeared from government organizations

I saw statistics that in England, almost every man is a gambler. These are scammers using other people's data to register accounts.
Don't worry about it, most personal data has long been stolen.