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Coinbase email scare causes massive user panic

Coinbase

TL;DR Breakdown

• Many users on Coinbase sold their cryptocurrencies, fearing a new hack.
• The crypto platform had a failure within weeks of being hacked.

The largest cryptocurrency platform in North America, Coinbase, admits that its system suffered a failure. The crypto exchange sent an email where it informed users about the change of their two-step verification setting.

Although users doubt it, the company reveals these adjustments were due to an internal failure rather than a cyber-attack. Coinbase could be dealing with a massive loss of its customers if it does not guarantee security within its crypto exchange.

What happened to Coinbase? Security issues

Coinbase

The company contacted over 120,000 users by email, informing them of a need to change their two-step verification. As expected, many users were scared, thinking that their account had been hacked. Some people sold their cryptocurrencies to avoid being stolen within the interface if the supposed “failure” was a cyber-attack.

When the developers saw these desperate crypto moves, Coinbase automatically sent another email notifying them that the above message had been an error. This not-so-bold email confirmed that the cryptocurrency company had a major failure.

The US company tweeted that its team was solving the problem to guarantee a secure platform for all users. However, the damage was done because customers did not let this false-positive assumption pass.

US crypto platform loses popularity

Andrew Schmitt, agent in charge of Coinbase, clarified that the problem was caused by an internal failure and not by a hacking attempt. According to Schmitt, the system sent alert emails that reached registered users. However, this error was not caused by anyone on the platform.

A client of the crypto platform confessed that he sold around $60,000 in cryptocurrencies after the notification arrived in the mail. This small incident was the perfect trigger to talk about the cryptocurrency exchange and its security guarantees.

Schmitt also said that the company worked most of the weekend to eliminate the failure and apologize to the affected users. The broker acknowledged that these platform stumbling blocks affect trust between client and exchange but hoped that his crypto team can redeem itself.

The problem with Coinbase comes after users were victims of a cyber-attack. Cybercriminals used the SIM changes to steal users’ accounts. These swap SIMs were sold on the dark web for about $150.

Since the cyber-attack, the cryptocurrency platform has experienced a slight clientele loss. Coinbase has also been affected by the emergence of new crypto platforms with more competitive interest rates.

Carisbel Guaramato

Carisbel Guaramato

An avid content creator for over 4 years, Carisbel spends her time on blogs and technology news. She honed her skills as a social communicator and now finds crypto and blockchain news events worldwide for transmission through Cryptopolitan's neutral and incisive way.

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