Discover a more secure Coinbase Wallet to explore the Web3

The largest US crypto exchange, Coinbase, refuses to take responsibility for a security breach that led to huge losses. At the same time, it categorically refuses to reimburse the losses suffered by its customers as a result of a security breach.

Duel between customers and Coinbase executives

Early in the morning of Tuesday, March 7, Bloomberg announced bad news for Coinbase customers. Despite the lawsuits, the exchange’s executives refuse to accept responsibility for its hack that took place last year. The platform also refused to reimburse the victims of this hack. Indeed, the company made this known to an account holder who lost $96,000.

According to victim Jared Ferguson, the company emailed him saying it was his fault and not theirs. In an email he allegedly received from Coinbase, it read: “Please note that you are solely responsible for the security of your email, passwords, 2FA codes, and devices.”

As a reminder, Ferguson is suing Coinbase for losses resulting from a security breach in May 2022. He further states that “theCoinbase email accepts no responsibility for hacking into customer accounts “.

Coinbase Hacking or Security Flaws?

Returning to the context of the loss of his funds, the victim charges the exchange platform. He claims to have received an SMS from his mobile operator requesting a change of SIM card. However, Ferguson wouldn’t have done it just now. The next day, when he restored service to his device, he discovered that his Coinbase account had been drained. The victim adds that this account contained almost all of his savings.

Ferguson assures that under state and federal laws, Coinbase is liable for unauthorized withdrawals. Nevertheless, the multi-billion dollar US crypto exchange thinks otherwise. According to the plaintiff, Coinbase is liable because the security procedure of the exchange seems weak. He castigates the fact that it has failed to report manifestly fraudulent and unauthorized transactions.

He claims that a new device successfully wiped out his account within eight hours of resetting his password. In addition, the password would have been reset from an IP address not previously associated with his account.

Should Coinbase’s security be questioned?

It is not the first time that users of the platform have complained about the losses suffered. In 2021, thousands of dollars were stolen from Coinbase accounts in a SIM swapping attack. Again, the company refused to reimburse the losses.

Despite being the industry leader in the United States, Coinbase has often been criticized for its lack of customer support. However, it should also be noted that mainstream media such as Bloomberg have been targeting crypto exchanges recently.

Basic AML/KYC Concerns

In a related development, Coinbase CEO Brian Armstrong hinted that his new Layer 2 network could be subject to anti-money laundering measures.

Speaking to Bloomberg Radio on March 6, Armstrong said Base would initially be centralized with transaction oversight.

I think the centralized players are the ones who will probably have the most responsibility to avoid money laundering issues. They will have transaction monitoring programs and things like that “, did he declare.

Base is the company’s new Layer 2 network that it aims to use to onboard 1 billion Web3 users. The network was launched as a testnet on February 23. After this phase, it is expected to roll out to mainnet in Q2 2023.

THE share price of the company fell 2.1% on the day. Just now, COIN changing hands for $63.30 in after-hours trading. From the above, it remains crucial to make a good choice of a platform for the security of your cryptoassets.

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