Fractal ID Data Breach Affects Decentralized Identity Users

A data breach at KYC provider Fractal ID exposed personal information of an estimated 5,000 users (0.5% of its base). Gnosis Pay is among the affected projects.

Decentralized identity platform Fractal ID suffered a data breach on July 14, 2024, compromising personal information of an estimated 5,000 users. The breach was discovered when an unauthorized party accessed an operator account and downloaded user data through an API script. Fractal ID identified and stopped the exploit within two hours.

The compromised data may include names, addresses, emails, selfies, and identification documents. While the exact cause of the breach remains under investigation, Fractal ID suspects it involved a stolen password.

The breach highlights the potential security risks associated with centralized storage of user data in decentralized identity solutions. Fractal ID, despite offering a decentralized identity product, uses centralized databases due to regulatory requirements.

Gnosis Pay, a decentralized payment network, is one of the confirmed platforms impacted by the breach. Fractal ID serves as their KYC provider and the breach likely affected users who completed identity verification through Gnosis Pay.

While the scope of the breach appears limited, it raises concerns for users who have used Fractal ID for KYC verification across various Web3 platforms. Fractal ID has yet to publicly announce the breach, but they are notifying affected users directly.

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