Financial advisory firm Kroll is at the center of controversy after a data breach exposed creditor information from crypto platforms.
Circumstances and Lawsuit
The lawsuit against Kroll was filed by Hall Attorneys on behalf of FTX customer Jacob Repko and others. It was registered in the Western District Court of Austin, Texas. The lawsuit alleges that Kroll was negligent by relying solely on email communication and having a corrupted claims verification procedure. This led to delays in processing claims and, in some cases, even loss of funds. The plaintiffs also seek to address issues creditors face due to Kroll's one-method communication.
Phishing Attacks on Creditors
The incident in August 2023 caused thieves to use stolen data to send phishing emails aimed at stealing personal information. Some creditors report receiving scam emails every day, often including their names, making the messages more convincing. One FTX creditor, Sunil Kavuri, stated on platform X, "FTX Creditors now daily receive scam emails impersonating FTX, Bahamas," along with a screenshot showing multiple scam emails.
Kroll's Response and Current Situation
In response, lawyer Nicholas Hall from Hall Attorneys mentioned that affected creditors might receive monetary compensation, and the court ruling could force changes in how Kroll operates. Additionally, Kroll faced criticism in March 2023 after a data breach exposed client invoices and email addresses. Meanwhile, FTX is preparing for its third round of reimbursements for creditors, starting September 30, totaling $1.9 billion, after previous payouts of $5 billion and $1.2 billion.
The lawsuit against Kroll highlights the importance of data protection and the need for effective communication with creditors in crisis situations.
