Robinhood is the latest casualty of what many consider as the worst nightmare of a modern-day tech company, a data breach.
A data breach is an illegal exchange that takes from the user and gives to the hacker.
What Transpired : Robinhood Hacking
Through a report in its blog post, the company pointed out that this hack attack occurred when a malicious hacker socially engineered a Customer Service Rep on the 3rd of November.
Through a phone, the hacker was able to gain access into the customer support systems and obtain the company’s client records in the millions; full customer names, email addresses, dates of birth, and ZIP codes of 310 customers.
The report further revealed that for ten specific customers, the hacker accessed more extensive details. However, it has not made public the nature of those details.
Neither the debit card nor Social Security numbers were exposed in the breach. Hence no immediate financial loss to the customer has occurred.
However, it’s common knowledge that with this kind of information, the hackers can use it to facilitate other types of attacks against Robinhood’s clients. For instance, email phishing since you sometimes need a person’s names and dates of birth to verify their identity.
Afterwards, the hacker demanded an extortion payment. And Robinhood has responded by notifying enforcement units and a security firm (Mandiant) to investigate the breach.
The Dynamics of this Data Breach
Data breaches are in most cases, the doing of a competitor, a former employee or an inside job. And the reason for this is that it’s these kinds of people who understand the security protocols used in running the company.
So, the investigation is likely to focus on whoever may have masterminded the trick on the customer service representative. Thus, giving the hacker access to the internal systems of the company.
According to a report by TechCrunch, “more than 5 million customer email addresses and 2 million customer names taken, as well as a much smaller set of more specific customer data.” And for a company that has been recently experiencing a nasty slack, this does not look good.
The Robinhood Company, which was once posting sequential revenue gains, just recently reported a net loss of $1.32 billion. And still another revenue decline is expected in Q4. This is not good at all.
Weird turn of Events
Some Robinhood customers still don’t see how this breach could affect their lives in the least, as reported by Bloomberg. But ignorant or optimistic, this could cost them dearly.
Cathie Wood’s ARK, which is the 5th largest shareholder in Robinhood, comes in and steps up buying its shares. And it surprisingly does so even as Robinhood’s stock fell 3.4%.