4,500 Doxed Tokensoft Users, Cold Storage Wallet Rush: Where’s the Silver Lining?

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Many might question the wisdom of launching a public fundraising event in the crypto space at the same time as confidence in the sector plummets.

But Tokensoft, a token sale platform in the process of creating The Soft DAO and releasing governance tokens to users, seems to have given the crypto community yet another reason to think twice about sharing personal information.

Recent events with FTX’s solvency crisis and its possible bankruptcy filing have led many crypto users to panic about their frozen funds this week.

Now, around 4,500 of their airdrop participants have a new cause for concern, after a Tokensoft Discord channel community manager named Nick G. appeared to upload a document to the IPFS containing the names, addresses, IP addresses, email addresses, and Ethereum wallet addresses of thousands of users.

Doxing users are pretty much the worst thing a crypto company can do, short of using their funds to power risky trades on a Bahamian exchange.

This may be a simple mistake: the Discord user may have thought they were only uploading a list of ETH addresses, and with the intention of illustrating addresses that would have “played the airdrop”.

Blockworks contacted Tokensoft and had not received a response at the time of publication.

A leading cryptographic security expert told Blockworks that “doing your own research is important, but knowing what data you are providing to a new entity is also important. Before YOLO gets into any angel deals or token sales, it’s important to ask people where they keep your data and what their policies are for deleting and sharing it. As an easy 101 tip, never upload images of credentials or documents, and don’t send via Telegram or email without encryption or password protection.

It is not the first time this week that crypto users have been reminded that trust can be misplaced.

FTX argues for self-custody

Most FTX customers, if not in the Bahamas, were unable to withdraw funds stored on the exchange. And some crypto owners are now learning a lesson in self-custody the hard way.

As a result, many of these customers have turned to hardware-based cryptocurrency wallet providers such as Ledger and Trezor. According to Ian Rogers, Chief Experience Officer at Ledger, Thursday was the busiest day for their customer support teams this year.

“Over 40% of requests came from users who wanted to securely move their crypto from exchanges to the safety of their Ledger Nanos,” Rogers said.

Due to the sudden increase in traffic on Wednesday, Ledger Live – the application built into the hardware device – experienced a server outage, which prevented users from sending or withdrawing funds. The issues were resolved after about an hour.

“We’ve had an unusual load on the device manager service, which has likely been users updating their device for the first time in a while or using a brand new device for the first time,” Rogers said. at Blockworks.

Rogers added that Ledger is “seeing its highest rate of sales on record, growing 7x week-over-week,” especially since the first signs of the crypto bear market in the spring of this year. .

A representative from SatoshiLabs, which markets the Trezor crypto hardware wallet, told Blockworks that it saw similar spikes in sales and traffic this week, correlating to reports of a Coinbase liquidity crunch in July. and the Celsius crash in June.

Trezor saw revenue from sales triple on Wednesday and Thursday, and traffic to its e-commerce site increased 350% over the same period, according to the company.

Josef Tetek, Trezor Brand Ambassador, said that while exchanges can provide a middleman service between sellers and buyers, “their motivation is to maximize revenue even when it’s not in the interest of the their clients”.

He added that exchanges “should never need to hold your keys for you.”

His lyrics reference one of the most popular refrains in the crypto world and one that is especially true after the events of this week: Not your keys, not your coins.


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  • Ornella Hernández

    blockages

    Journalist

    Ornella is a Miami-based multimedia journalist who covers NFTs, the Metaverse, and DeFi. Prior to joining Blockworks, she worked for Cointelegraph and also worked for TV channels such as CNBC and Telemundo. She started investing in Ethereum after hearing about it from her father and hasn’t looked back. She speaks English, Spanish, French and Italian. Contact Ornella at [email protected]
  • Jon Rice

    Jon Rice

    blockages

    Chief Editor

    Jon is the editor of Blockworks. Previously, he was an editor at Cointelegraph, where he also created and edited the magazine’s long-form publication. He is the co-founder of Crypto Briefing, which was launched in 2017. He is a strong advocate for diversity, inclusion, and equal opportunity in the blockchain industry, and a strong supporter of the potential for personal empowerment offered by the democratization of financial markets.


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