COINBASE

DESCRIPTION OF EVENTS

"Coinbase is a secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more." "As the leading mainstream cryptocurrency exchange in the United States, Coinbase has become a standard on-ramp for new crypto investors. Coinbase offers a wide variety of products including cryptocurrency investing, an advanced trading platform, custodial accounts for institutions, a wallet for retail investors, and its own U.S. dollar stable-coin."

"Coinbase was founded in 2012 and is a fully regulated and licensed cryptocurrency exchange supporting all U.S. states except Hawaii. Coinbase initially only allowed for Bitcoin trading but quickly began adding cryptocurrencies that fit its decentralized criteria."

"Its list expanded to include Ethereum, Litecoin, Bitcoin Cash, XRP, and many others with the promise of more as long as its requirements are met."

"Recently a hacker known as “Tree of Alpha” won a Coinbase bounty for finding and reporting a bug that could have severely harmed Coinbase."

"Anyone here can get me a direct line with someone at @coinbase, preferably management or dev team, possibly @brian_armstrong himself?"

"I'm submitting a hacker1 report but I'm afraid this can't wait. Can't say more either, this is potentially market-nuking."

"On February 11, 2022, we received a report from a third-party researcher indicating that they had uncovered a flaw in Coinbase’s trading interface. We promptly mobilized our security incident response team to identify and patch the bug, and resolved the underlying system issue without any impact to customer funds."

"Tree of Alpha stated that it was tinkering with the new advanced Coinbase trading platform to understand how orders were sent and executed. He said he placed an order on the ETH/EUR pair and noticed that the API needed a product identification, source, and recipient account."

"At first, I decided to poke around the new Advanced Trading platform to find out how orders are sent and what a successful one looks like."

"I put an ETH-EUR order from the UI, and grabbed the request that was sent."

"I noticed the API needs product, source and target account ids."

"In order to get a failed message, I changed the product_id to BTC-USD, but did not change the two account ids (source is my ETH wallet, target is my EUR wallet)."

"Expecting an error because my account is not allowed to trade the BTC-USD pair, the order just … goes through."

"I just used 0.0243 ETH to sell 0.0243 BTC on the BTC-USD pair, a pair I do not have access to, without holding any BTC."

"Hoping this is a UI bug, I check the fills on the order, and they match the API: those trades really happened, on the live order book."

"[T]here aren't many things quite as sobering yet terrifying as realizing you just put a 50 BTC limit sell order using 50 SHIB and everyone else can see it. 5 minutes later, I was sending this initial tweet."

"The consequences would have been so worst and beyond imagination, if any black hat hacker had found the nug, but thanks to Tree of Alpha, he not only saved Coinbase but all the traders that are trusting Coinbase security and trading billions of dollars on it."

"Thanks to the researcher who responsibly disclosed this issue, Coinbase was able to fix this bug in a matter of hours, and conclusively determine that it has never been maliciously exploited. We have also implemented additional checks to ensure that it cannot happen again."

"Around 11 p.m. UTC (6 p.m. ET), Coinbase tweeted that it had “re-enabled full service for retail advanced trading.”"

"Coinbase strongly supports independent security research, and when those researchers uncover serious issues, we want to ensure that they are rewarded accordingly. As a result, we are paying our largest-ever bug bounty for this finding: $250,000."

"The hacker himself told the case on his Twitter account, where he talked about how he got the “biggest bug bounty in history.” Tree of Alpha received a total of $250K for identifying a fatal bug."

Explore This Case Further On Our Wiki

Coinbase had a critical bug in their centralized trading platform, which would have allowed hackers to swap assets for one another arbitrarily in making trades. For example, a user could trade BTC to USD, but actually offer up only an equivalent amount of Shiba Inu token. No funds were lost as the issue was reported by a white hacker to CoinBase, in exchange for a $250k bounty.

Reddit - Dive into anything (Feb 23)
Hacker Revealed A Coinbase Bug That Allowed Him To Buy 50 Bitcoins For 50 Shiba Inu - The Crypto Basic (Feb 23)
https://www.coinbase.com/ (Dec 4)
https://www.coinbase.com/about (Dec 4)
Morioh (Dec 4)
@Tree_of_Alpha Twitter (Feb 26)
@Tree_of_Alpha Twitter (Feb 26)
@brian_armstrong Twitter (Feb 26)
Jaw-dropping Coinbase security bug allowed users to steal unlimited cryptocurrency | The Daily Swig (Feb 26)
https://blog.coinbase.com/retrospective-recent-coinbase-bug-bounty-award-9f127e04f060 (Feb 26)
Coinbase Trading Vulnerability Exposed by White-Hat Hacker (Feb 26)
@brian_armstrong Twitter (Feb 27)
@CoinbaseSupport Twitter (Feb 27)
HackerOne (Feb 27)

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