$4 000 USD

MAY 2020




"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."


Reddit user and CoinBase customer signalme had "text authentication and email authentication, too." "[I] do have hardware wallets. I have the text verification (the first step) then the email verification (needed in addition to the first step)." "Through AT[&]T, I have passcode that’s only stored in my head." "[I]n addition to my passcode, AT[&]T said they added the highest level of security on my account."


"[C]oinbase only offer [SMS] and an email link verification, right? ATT only offers a passcode, which is only stored in my head." "I’ve not been around anyone for weeks now. [Y]ou can’t ever be too sure though."


On May 17th, 2020, "a hacker compromised my Coinbase account and bought Bitcoin with every bit of money I had on my debit card. I have no money in the bank now." "[A]t 9:06 someone called [AT&T] to swap, and swapped my SIM card, and took over my phone, and that gave them access to all the app[lication]s on my phone." "They got access to all of my accounts."


"They reset my coinbase passcode." "What they did is used my bank account through my coinbase to purchase bitcoin with all the funds [I] have in the bank." "They got me for $3500, which is all I had in the bank."


"Either the customer service rep[resentative] let them access my account without the passcode or the customer service rep[resentative] is working with one of the big hacker groups that have members employed through these companies."


"I’ve lost hours at work and now all money is gone from the bank."


"I asked [AT&T] what they did[ for the highest level of security. T]hey said they put a note on the account?! A freaking note is the highest level of security they offer?! Ridiculous!" "They have a passcode and that's the highest level security. They said they upped my security. I said 'how's that?' and they said they put a note on it. So notes - the highest security you'll get."


"I’m try[ing] to get AT[&]T to listen to the phone call that did the sim swap to see how the account was verified." "I’m trying to escalate the case at AT[&] to have the call listened to to see if the customer service rep[resentative] even asked for the passcode." "I made a video of AT[&]T admitting fault and responsibility for the sim swap attack, but they didn’t offer a resolution for the time, damages or stolen funds. Even though they said it’s their responsibility!"


"The[ bank's] customer service line listed on the back of the debit card should be able to assist." "I’m praying that[ I can get the bank to do a chargeback], but they don’t open until in the morning. [E]ven their freaking fraud department is closed and it’s a national bank?!"


"The bank is doing a fraud investigation." "The bank credited a couple transactions, but I have to fill out a form for the rest and email it to them." "I had to get a new card today."


"The state police opened up a criminal investigation and wants all the info I’m finding out." "There’s a criminal investigation going on to see if it was an actual call or if customer service verified correctly."


"Coinbase hasn’t done anything!" "I file the case and already got email from Coinbase saying the case is closed, offered no resolution." "Coinbase is not trying to help for any of the funds that the hacker used from my bank account! A regulated US company. I get that they can’t reverse the crypto you already have, but they store our banking info and the hacker used my attached debit card to use USD to purchase Bitcoin that I didn’t even have in the first place." "I’m stuck, I don’t know what to do!"


Coinbase later responded: "[W]e're sorry to hear about this experience you've had. If you've filed a support case with us already, would you mind sharing the case number with us so we can take a look?"


"Additionally, you have not already done so, it is imperative that you report this incident to law enforcement agencies in your jurisdiction immediately including the FBI Internet Crime Complaint Center (IC3) here. Be sure to include as much detail as possible in your report. Coinbase is willing to offer full cooperation with all law enforcement investigations pertaining to your account's compromise."


"We can see that our team actually replied to your email, can you let us know if you received that email? If it's not in your inbox check out your spam or junk folders."

Reddit user signalme was a customer of both Coinbase and AT&T. They used SMS-based two-factor authentication to secure their Coinbase account, and had a bank account with $3,500 hooked up to their account. Their AT&T account was secured with the highest level of security available at the time, which is a note that requires a passphrase to be provided to the customer support representative. Access to their email address is also required.


On May 17th, 2020, they suffered a SIM swap attack where the SIM card of their phone was transfered to the phone of a hacker. The hacker was then able to use that access to "recover" their Coinbase account, initiate a withdrawal from their bank account, and withdraw the funds into a new bitcoin address on the blockchain. While their bank was able to reverse some portion of the fraud, it is unclear if all funds were returned. An investigation was also launched by state law enforcement. It is unclear what outcome came from the investigation.


SMS-based two-factor authentication is known to be a weak form of security, and it would be recommended to avoid it whenever possible. More secure forms of authentication would be specific hardware devices such as YubiKey or an unused computer/phone with an authenticator application.


Other methods of protection would include adding delays on withdrawals whenever an account password is changed, adding a delay for adding a new withdrawal address to an account, detecting access from a new location, or placing delays on withdrawals of large amounts.


Check Our Framework For Safe Secure Exchange Platforms

Sources And Further Reading

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