Coinbase reports hack of accounts of 6,000 customers

Karthik Subramanian

Coinbase, one of the largest crypto exchanges in the world, has reported that 6,000 customers accounts at Coinbase had been hacked which led to a loss of funds for the users which has since been fixed.

The hack is reported to have taken place between March and May of this year and had affected 6,000 accounts. It resulted due to an error in the SMS notification sent out for a wallet restore function where the SMS did not reach the intended recipient but was instead rerouted to the hackers’ numbers. This helped them to gain access to the user accounts and transfer their funds to those of the wallets owned by the hackers. The company said that it had since quickly fixed the bug, informed the users about the issue, restored the account access to the users, and also refunded the losses back to the clients.

Though the company has voluntarily come forward now to declare details of the hack, the fact that this has happened at a major exchange that has reported about it only several months later should come as a surprise to the crypto industry. Those sketchy details had emerged earlier, the details were not declared and the company was also not forthcoming at that time. It had to declare these details now as it has become a publicly listed company but critics would feel that this could have been handled in a better manner and the crypto community could have been taken into confidence about this breach which could have helped in recovering the funds and would have also helped the community to be richer by the experience.

The fact that the company has not helped to share this with the community and seeks its help should be a matter of concern for the crypto industry which thrives on community growth and help. Coinbase is already at loggerheads with SEC concerning some of its products like lending and the fact that it needs the help of the growing community of crypto users to indirectly pressurize the regulators to take initiative in regularising crypto-related business, should be realized by the company in the long run. This incident would also further dent the confidence that users have in centralized exchanges, where wallets and funds are controlled by the exchange, and push the case for DeFi and DEX further.

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