Kroll Faces Class-Action Lawsuit Over Data Breach
Kroll, a financial and risk advisory firm, is currently embroiled in a class-action lawsuit that claims it acted negligently in connection with a data breach affecting clients involved with FTX, BlockFi, and Genesis. This legal action, initiated on Tuesday in a US district court, has been brought forth by Hall Attorneys on behalf of Jacob Repko, a customer of FTX, along with other cryptocurrency creditors who were harmed by the incident.
Details of the Lawsuit
The lawsuit contends that due to a data breach that occurred in August 2023, sensitive personal information of these creditors was compromised, leading to a surge in phishing attacks. In phishing scams, cybercriminals impersonate legitimate entities to trick individuals into divulging confidential information. The complaint criticizes Kroll’s communication strategy for being overly reliant on email, thereby exacerbating the situation.
In their assertions, the plaintiffs highlight that Kroll’s process for verifying claims had been jeopardized by the breach, resulting in significant delays and in some cases, losses of funds. The suit not only seeks compensation for damages but also aims to rectify the communication problems that creditors have experienced due to Kroll’s limited avenues for outreach.
Community Response and Expert Insights
Sunil Kavuri, an influential figure within the FTX creditor community, discussed the ongoing phishing threats in a recent post on X, indicating that victims receive malicious emails daily – he even showcased a phishing attempt featuring his name. This sentiment was echoed by another responder, who shared similar experiences of receiving fraudulent emails.
Nicholas Hall, part of the Bankruptcy and Complex Litigation team at Hall Attorneys, noted that depending on the court’s ruling, eligible plaintiffs might receive financial restitution and prompt Kroll to implement operational changes. Hall Attorneys also manage the FTX Claims website, providing support to creditors navigating their claims.
Additional Context on Kroll’s Data Breaches
It’s worth mentioning that Kroll encountered yet another data breach in March, where sensitive information including client invoices and email addresses were compromised. In the crypto realm, the third reimbursement round for FTX creditors is scheduled for September 30, with anticipated payouts reaching $1.9 billion, although it may exclude foreign creditors from nations like China and Russia. In the previous reimbursement phase earlier this year, more than $5 billion was distributed, with plans for $1.2 billion aimed at customers whose claims were valued up to $50,000 being set forth in February.
