3Commas class action claims users victimized in data breach

3Commas class action overview:

• Who: Twelve plaintiffs filed a class action lawsuit against 3Commas, a cryptocurrency software company.
• Why: The plaintiffs say cybercriminals hacked their accounts and exploited them to make unauthorized trades.
• Where: The case was filed in California federal court.

A dozen plaintiffs claim they lost thousands of dollars after hackers broke into their 3Commas cryptocurrency accounts and made fraudulent transactions, according to a new data breach class action lawsuit. 

3Commas provides automatic crypto-trading software, or bots, that automatically make trades on cryptocurrency exchanges. The technology analyzes the crypto market and makes automatic trades based on certain conditions or indicators.

The 3commas class action explains that for bots to work, they need an application programming interface, known as an API, to authenticate identity and permissions. It’s through this API that cybercriminals hacked into accounts, according to the lawsuit. 

Some users allegedly lost hundreds of thousands of dollars. 

“There were dozens and dozens and dozens of trades,” one of the plaintiffs says in the 3commas class action. “Basically they used my API details to sell all of my assets into a low-cap, low-liquidity coin.” 

This resulted in a total loss of $200,000, the lawsuit alleges. 3Commas claimed the total loss from the first attacks was around $6 million but later stated cybercriminals stole $22 million from users.

3Commas data breach initially blamed on phishing scams

Initially, 3Commas blamed the breach on phishing scams, where a threat actor sends an email to customers claiming a security risk and pointing them to websites made to look like official ones. 

But many crypto consumers, most of them astute in technology and scams, say they found no such phishing websites in their browser histories, according to the 3Commas class action.

The lawsuit alleges the 3Commas data breach occurred because the company did not protect API data with encryption. It also claims the company did not properly warn and protect consumers after it detected the initial breach, resulting in even more massive financial losses.

Did you lose money in the 3Commas data breach? Tell us in the comments.

The attorneys for the plaintiffs are Thiago M. Coelho, Carolin K. Shining, Jonas P. Mann, Jennifer M. Leinbach, Jesenia A. Martinez and Jesse. S. Chen of the Wilshire Law Firm PLC.

The 3commas class action is Charles Freeman, et al.  v. 3Commas Technologies, an Estonian Private Limited Company, Case No. 3:23-cv-00101, in the U.S. District Court for the Northern District of California.

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