Aleo, a decentralized blockchain platform, experienced a data leak on February 25th, as reported on X (formerly Twitter). The platform specializes in zero-knowledge (ZK) cryptography and utilizes a third-party protocol for Know Your Customer (KYC) procedures.
A user named Emir Soytürk reported that Aleo mistakenly sent him KYC documents, which included selfies and ID card photos of another individual. This incident raised concerns about the security of his own personal information. Another user, Selim C, confirmed this claim, stating that he also received the KYC documents of a different person in his email.
To receive rewards on Aleo, users are required to complete KYC and Anti-Money Laundering (AML) procedures, as well as pass the Office of Foreign Assets Control (OFAC) screening, in accordance with Aleo’s internal policies. This process must be completed when signing up for HackerOne, a third-party protocol used to collect users’ unencrypted KYC data.
ZK layer-1 blockchain platforms prioritize privacy and security for users. They employ ZK-proof cryptographic techniques, enabling transactions without revealing specific details and ensuring confidentiality. This approach enhances privacy in blockchain transactions, giving participants greater control over their data and making transactions more secure and confidential.
Cointelegraph interviewed Mike Sarvodaya, the founder of Galactica, a layer-1 blockchain infrastructure, who explained that protocols like Aleo should theoretically never allow access to user data. He emphasized the importance of creating storage and proof systems for sensitive data, such as Personally Identifiable Information (PII), based on ZK or fully homomorphic encryption (FHE). In these systems, protocol rules must prevent any single party from disclosing stored data.
The Aleo mainnet is scheduled to launch in the coming weeks after addressing final bugs. This launch aims to bring privacy to cryptocurrency transactions, as stated by Alex Pruden, the executive director of the Aleo Foundation, in an interview with The Block.
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