Coinbase, the biggest crypto exchange in the United States by trading volume, has found themselves in a whirlpool of unfortunate events due to an uncanny cyberattack. Coinbaseโs stock dripped 7% in a few hours, attracting negative attention from the Securities and Exchange Commission (SEC), which is now investigating Coinbaseโs userbase claims.
SEC Calls Out Coinbase On 100M User Claims
Back in 2021, Americaโs crypto giant claimed to serve more than 100 million verified platform users across the globe. However, the new chief of SEC Paul Atkins and his team have their reservations about Coinbaseโs 2021 statement on 100M users being true.
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Pressing out a probe, the SEC turned the heat up for Coinbase at the worst time possible, as the exchange succumbed to data breach. India-based customer agents working for Coinbase have been bribed to give away sensitive user data, including government ID images, phone number, addresses and some financial information.
Multiple Coinbase users on Twitter have complained about receiving weird phone calls after the incident, with bad actors impersonating Coinbase representatives to extract more information in order to complete pieces of the puzzle. In a detailed description of the fraudulent scheme, one of the victims claimed that the fraudsters ask to withdraw userโs funds to a self-custodial wallet.
Concise Breakdown Of Coinbase Data Breach
Firstly, the due a pretend personal info verification procedure, to understand if this Coinbase customer is worth a lot of money as a scam victim. Moreover, the impersonating call is centered about a supposed move from Coinbaseโs on-site balance to a self-custodial wallet, of which the hackers can take over control and drain the funds at any time.
While these tactics might seem silly to more experienced crypto connoisseurs, eventually it did work like a charm. According to Qiao, one of the victims, the on-chain hackers were bold enough to confess over the phone that they had made $7 million this way that day.
Right now, Coinbase has rejected the hackerโs $20 million ransom demand. Instead of negotiating with the cybercriminals, Coinbase set up a $20 million bounty to capture the hackers, but without success yet.
On The Flipside
- Luckily, the hackers who bribed Coinbase customer service workers in India werenโt able to get their hands on 2 factor authentication (2FA) codes, log private keys or take over wallet control.
Why This Matters
To prevent similar security breaches in the future, stronger account security processes have to be exercised. To solve this, Coinbase is working on a monitoring system in partnership with several analytics companies.
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