UNKNOWN

MAY 2021

UNITED STATES

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."

 

"Between April and early May 2021, the Coinbase security team observed a significant uptick in Coinbase-branded phishing messages targeting users of a range of commonly used email service providers (you can learn more about phishing in our Help Center.) Though the attack was broad, it demonstrated a higher degree of success bypassing the spam filters of certain older email services."

 

"The messages used a wide variety of different subject lines, senders, and content. It sometimes sent multiple variations to the same victims. Depending on the variant of email received, different techniques to steal credentials were used as well. The following screenshots show a representative victim experience, but wouldn’t necessarily have been seen in exactly this order by all victims."

 

"For some victims with Hotmail accounts, attackers attempted to add a malicious application to the user’s inbox. If the recipient clicked “Yes”, an attacker would be able to read all the user’s emails (including password reset and device verification emails sent by Coinbase)."

 

"Finally, the user would be sent to a Coinbase-branded phishing page attempting to capture the user’s Coinbase login credentials. Note that while the URL contains the word “coinbase”, the domain is not “coinbase.com” Once the attackers had compromised the user’s email inbox and their Coinbase credentials, in a small number of cases they were able to use that information to impersonate the user, receive an SMS two-factor authentication code, and gain access to the Coinbase customer account. With access to these accounts, the attacker was able to transfer funds to crypto wallets unassociated with Coinbase."

 

"Once [Coinbase] learned of the attack, [they] took a number of steps to protect customers, including working with external security partners to take down malicious domains and websites associated with the phishing campaign, as well as notifying the email service providers most impacted by the attack."

 

"Coinbase, like most financial institutions or FinTech companies, will never contact you asking for your password, two-factor authentication codes, or to take actions like installing new software or sending funds to a cryptocurrency address." "Coinbase provides a number of resources to help customers avoid online scams and report potential malicious activity. Cryptocurrency transactions are irreversible. If you (or a hacker who has accessed your account illegitimately) send cryptocurrency to a third party, it cannot be reversed or stopped."

Coinbase is one of the leading crptocurrency exchange platforms in the United States. Around the timeframe of April-May 2021, scammers started launching phishing attacks targetting Coinbase users. In these schemes, the scammers would scare the user into believing that their account had been breached. When the user tried to restore their access, they would be asked to approve permissions to view email messages, then provide their username and password to log in. Users who provided their login details into the website would be giving them directly to the thieves, along with the ability to access any confirmations that may be sent by email. This could be used to drain the customer's account of all cryptocurrency funds. It is unknown what funds were lost, and there are no reports of funds being recovered. In September 2021, Coinbase decided to share a blog post to warn users about the phishing attacks from several months prior.

HOW COULD THIS HAVE BEEN PREVENTED?

Always be sure to only interact with platforms through their official website or specific solicited emails. While many platforms will email you about suspicious activity if your account is breached, you can always check with the website and attempt your login directly. Sometimes you may have to click a link you receive by email in order to confirm certain actions, which is different because you specifically performed an action to trigger the email.

 

Be sure to check that emails come from the official domain name of the platform and that there's no typo present. You can hover over links in emails to confirm they also go to the correct domain name. If in doubt, email the support service of the platform in question.

 

Platforms can protect themselves by blocking/delaying large withdrawals when logging in from an IP address which is inconsistent with past login activity.

 

Check Our Framework For Safe Secure Exchange Platforms

Sources And Further Reading

 For questions or enquiries, email info@quadrigainitiative.com.

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