Kroll hit with class action over FTX data breach

A class action lawsuit has been filed on financial firm and FTX victim reimbursement handlers Kroll. Creditors claimed that their personal information was leaked in a 2023 data breach, exposing them to phishing attacks. 

The lawsuit was submitted on Tuesday by Hall Attorneys representing FTX customer Jacob Repko and other affected parties, in a US court for the Western District of Austin, Texas. 

According to court documents, the breach occurred on or about August 19, 2023, when an unauthorized third party got a hold of a mobile phone number belonging to a Kroll employee. 

After obtaining the contact, the hackers used it to infiltrate Kroll’s cloud-based systems and obtain files containing sensitive creditor data including customer names, home addresses, email addresses, and balances in the fallen crypto trading platform’s accounts.

Kroll issues notice for data breach

Kroll confirmed the breach in a notice to creditors, insisting that no FTX passwords or digital assets were compromised. 

“The attacker might use this information in a further scam, for example, by sending phishing emails to trick you into providing sensitive personal information,” Kroll said at the time. 

The firm added that other accounts and systems were not impacted and that FTX assets were unaffected.

However, Hall attorneys claim the breach has exposed creditors to scam emails and direct financial losses. Repko, the lead plaintiff, told the court that he lost 1.9 ETH in July 2025 after a phishing attack diverted funds he was attempting to transfer into his digital wallet.

The complaint also mentioned there were operational problems with the FTX Customer Claims Portal. According to Repko, his Know Your Customer (KYC) status repeatedly toggled between “Verified” and “On Hold/Unverified,” preventing him from uploading the necessary tax forms required for distributions. 

Per the plaintiff, even after making multiple attempts and writing dozens of support emails, he was unable to resolve the issue.

“Because the FTX Portal gates tax-form upload behind ‘KYC Verified,’ Plaintiff cannot complete the final prerequisites; under the confirmed plan and trust communications, claims may be expunged or distributions forfeited if tax forms are not timely uploaded,” the filing read.

Daily phishing complaints from creditors

According to a Thursday X post made by FTX creditor and activist Sunil Kavuri, creditors have been receiving scam emails nearly every day. Kavuri shared one message he received with his name embedded in the message, alongside several phishing attempts between August 14 and as recent as last Sunday.

Other users joined Kavuri with incidents of their own phishing attempt experiences, with one responding that they had also received similar fraudulent messages. 

The class action demands Kroll to make systemic changes in how it handles creditor’s information, such as including multi-channel notices through both email and physical mail, mailed status-change letters with mandatory cure windows, and the option for creditors to upload tax forms manually without KYC gating.

“This is a servicing case, after a known security incident and impersonation wave, you can’t run deadlines on email-only and offer no mailed confirmations or manual fallback,” wrote Nicholas Hall, lead counsel for the plaintiffs, in a press statement.

Hall also said that eligible participants could receive monetary compensation depending on the court’s ruling, and the case could force operational changes at Kroll. His firm, Hall Attorneys, also operates the beleaguered exchange’s claims website and provides assistance to creditors managing their claims.

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