Byte Federal Data Breach Affects 58K Customers, Stealing Critical User Information

Byte Federal Inc, one of the largest operators of automated teller machines (ATMs) for Bitcoin BTC $102 340 24h volatility: 1.7% Market cap: $2.03 T Vol.

One of the largest operators of automated teller machines (ATMs) for Bitcoin (CRYPTO: BTC) in the United States, Byte Federal Inc, announced that up to 58,000 customers were affected by a major data breach that occurred on Sept. 30, 2024, but was discovered on November 18.

According to a filing to the office of the Maine Attorney General submitted by the company’s COO and CIO, Lee Hansen, a total of 111 Maine residents were affected by the data breach, which occurred via an external system.

What Happened: The company previously noted that the hackers gained unauthorized access to one of their servers by exploiting a vulnerability on GitLab, a third-party software platform.

The company highlighted that no user funds or digital assets were compromised in the data breach.

However, Byte Federal indicated that the hacker stole critical user information that could compromise overall security.

Moreover, the attacker accessed personal data including on-chain transaction history, photographs of the users, phone numbers, email addresses, government-issued IDs, social security numbers, physical addresses, birth dates, and names.

As a result, the attackers could easily track down the Byte Federal customers and force them to cash out funds, as observed in prior similar reports.

Meanwhile, Byte Federal has urged all customers to reset their login credentials to minimize the chances of fraud and identity theft.

Additionally, the company urged the customer to place a fraud alert or a security freeze feature with the respective agencies to prevent someone who fraudulently gains their personal information from opening a new account and potentially borrowing funds.

Impact On Bitcoin And Altcoin Industry: Byte Federal has grown to more than 1,200 Bitcoin ATMs in the United States in the past few years. The company highlighted that it performed a hard reset on all customer accounts and updated all the internal passwords to prevent further damage from the attackers.

However, the company lost a lot of trust from the customers, who might get their personal information for sale on darknet marketplaces. As a result, Byte Federal will face major headwinds in attracting more customers in the near term compared to its competitors.

Some of the major Bitcoin ATM companies in the United States include General Bytes with over 12k kiosks, Genesis Coin with over 9.6K kiosks, BitAccess with over 8.8K kiosks, and Bitstop with over 2.6K kiosks.

The cryptocurrency will continue to grow exponentially as more Web2 companies join the wagon and lawmakers enact favoring regulations. Moreover, the United States is expected to enact a strategic Bitcoin reserve legislation to purchase up to 1 million BTCs to help fight the national debt crisis.

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