Key Takeaways
- Scattered Spider was responsible for a data breach at Crypto.com.
- The exchange has been called out for failing to publicly disclose the incident at the time.
- Criticism of Crypto.com threatens to overshadow its investment in Moonlander.
It was recently revealed that Crypto.com was targeted by the cybercriminal network known as Scattered Spider.
Scrutiny of the previously unreported incident coincides with the exchange’s announcement on Sept. 22 that it has invested in Moonlander, a decentralized perpetual futures exchange built on Cronos.
Scattered Spider Targeted Crypto.com
On Friday, Sept. 19, Bloomberg ran a story on Scattered Spider, an international cybercrime group responsible for a string of high-profile incidents in recent years.
The report drew from interviews with Scattered Spider member Noah Urban, who is currently serving a ten-year prison sentence for his role in the group’s attacks.
Speaking to journalists, Urban revealed how he used social engineering tactics to gain access to secure systems, including a Crypto.com database whose breach hadn’t been previously reported.
Jumping on this detail, prominent crypto influencer ZachXPT slammed the exchange:
“Your team covered up a breach that impacted the personal information of your users,” he alleged on X.
Crypto.com Downplays Data Breach
Responding to ZachXBT’s charges on Monday, Crypto.com CEO Kris Marszalek denied covering the incident up.
“Any suggestion that we did not report or disclose a security incident is completely unfounded,” he stated. “The incident was contained within hours, no customer funds were accessed or ever at risk, and impacted an extremely limited number of our users’ partial [Personally Identifiable Information].”
But although the company may have filed disclosures with the appropriate authorities, there is no evidence that it notified affected users.
“User balances, names, emails, & phone numbers leaked from other incidents is a bit more than just ‘partial PII’” ZachXBT observed in response to Marszalek’s statement, alluding to another undisclosed data breach he said he is aware of.
Negative Coverage Eclipses Moonlander Investment
Amid the furore over Crypto.com’s data breach, Monday’s Moonlander announcement is pitched as the Cronos ecosystem’s answer to Hyperliquid, Moonlander offers stablecoin and CRO yield opportunities and decentralized perp trading.
The latest fundraiser comes as rival platforms like the Binance-backed Aster Decentralized Exchange (DEX) are starting to gain traction.
While Hyperliquid remains the dominant DEX for perpetual futures, a rising crop of alternatives are snapping at its feet, and the exchange-funded venture investors responsible for growing their respective blockchain ecosystems clearly see an opportunity.
Announcing its investment, Crypto.com Capital touted Moonlander’s “unparalleled on-chain trading experience, featuring up to 1000x leverage, superior capital efficiency and institutional-grade security.”
Meanwhile, Moonlander co-founder Athena highlighted Cronos’ “perfect blend of security, speed, and access to a massive and engaged user community.”
While that community may have its roots in Crypto.com’s centralized exchange, the firm’s entry into the world of decentralized finance presents its own challenges, highlighted by the announcement’s focus on security.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
