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Coinbase Exchange reveals it was compromised with 6,000 users affected

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TL;DR Breakdown

  • Coinbase exchange says its platform was compromised by third-party actors.
  • Exchange says hacker possibly got access through phishing attack.
  • 6,000 Coinbase users affected during attack.

The number one American crypto platform, Coinbase exchange, has revealed that third-party actors compromised its platform between March and May. The exchange revealed approximately 6,000 users were affected in the attack.

Coinbase exchange noted that an unauthorized third party gained access to the accounts of at least 6,000 Coinbase clients and drained an undisclosed amount of funds from there.

According to Coinbase exchange, the hack was possible because perpetrators had “prior knowledge of the email address, password, and phone number” associated with each account.

The exchange noted that it is yet to find out how these hackers managed to get the information but noted that it is possible the third party gained access to the information through phishing attacks or other social engineering techniques to “trick a victim into unknowingly disclosing login credentials.

At the same time, the platform’s two-factor authentication through SMS texts had a flaw, which they were able to exploit. Ultimately, the hackers were able to transfer the funds out of the compromised accounts.

Coinbase promised to upgrade its authentication and other security protocols. Also, the exchange said it would deposit funds into the affected account “equal to the value of the currency improperly removed” during the time of the incidents.

The firm noted that some users have gotten reimbursement while others would get theirs before the end of the day.

Coinbase exchange sees massive growth despite compromise

It is worthy to note that the exchange experienced a massive surge in new users between Q1 and Q2 of the year when the compromise happened. The number of users on the platform reportedly surged 30% between Q4 of 2020 and Q1 of 2021 and 21.4% between Q1 and Q2 of this year.

Also, the incident happened at a time when the giant exchange became a publicly-traded company. Coinbase’s shares went live for trading on Nasdaq in April.

Muhaimin Olowoporoku

Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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