Coinbase Sim Swapping Lawsuit

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Coinbase

A New York resident was a regular Coinbase platform user, who protected their account using SMS-based two factor authentication. On August 26th, 2020, their mobile phone number was swapped over by their mobile phone carrier, Sprint. This allowed the attacker to reset their Coinbase password and gain entry into their account, and a full withdrawal of all funds was authorized. The total amount lost was estimated at $400k in February 2021, however the value would have been significantly less in August 2020. Specific details about which cryptocurrencies were owned and which wallet has the funds now could not be located. It is not believed that any funds were recovered.

This exchange or platform is based in United States, or the incident targeted people primarily in United States.

About Coinbase

"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."

"The ability to port your SIM card to another device is a service that mobile carriers provide to their customers. It allows a customer to request their phone number be transferred to a new device. In most cases, this is a perfectly legitimate request; this happens when we upgrade to a new phone, switch mobile carriers, etc."

"A “SIM port attack”, however, is a malicious port performed by an unauthorized source — the attacker. The attacker ports your SIM card to a phone that they control. The attacker then initiates the password reset flow on your email account. A verification code is sent from your email provider to your phone number — which is intercepted by the attacker, as they now control your SIM card."

"Plaintiff is a resident of the State of New York." "In or about 2017, Plaintiff created an account with Coinbase." "Plaintiff enabled Duo Two-Factor Authentication (Duo 2FA) as an added layer of security for Coinbase transactions."

“Authenticators like Duo … provide an extra layer of protection in addition to your password. When using an authenticator for your two-step verification codes, you’ll be protected even if your password is stolen or your phone number is ported since these apps are tied to your mobile device and not your phone number.”

"On August 26, 2020 at or around 10:00 pm EST, Plaintiff lost cellular service on his phone." "Simultaneous to Plaintiff’s lost cellular service on August 26, 2020, Plaintiff was unable to access his Coinbase account through the Coinbase App or through his computer."

"At or around 10:15 pm EST on August 26, 2020, Plaintiff emailed Coinbase Customer Service and notified them of his loss of cellular service." "Plaintiff directed Coinbase to lock his account."

"Plaintiff’s assets were stolen from his account by a hacker who used a foreign device and a foreign IP address, from a location never before used by Plaintiff." "On August 26, 2020, Coinbase received three sequential requests for a password reset for Plaintiff’s account. Each of the above-mentioned password reset requests were made from a foreign, web-enabled device never before used by Plaintiff. These communications were received from a device containing information not stored by Coinbase to identify Plaintiff." "The IP address from which these requests were made was geographically located in Denver, Colorado." "After the third password reset request, 19 Sign-out Sessions were recorded from the same, foreign IP address and foreign device."

"Coinbase then authorized a password reset for Plaintiff’s account from a foreign device, to an unknown party." "Coinbase allowed this Coinbase-authorized but unknown party, using a foreign device and foreign IP address, to immediately transfer Plaintiff’s funds." "Coinbase authorized all of Plaintiff’s funds to immediately be depleted, an action unlike previous activity of Plaintiff and inconsistent with industry standards and safety protocol." "Coinbase authorized the entirety of Plaintiff’s funds to be transferred in violation of its own Transaction Limits."

"For five days, between August 26, 2020 and August 31, 2020, Plaintiff was unable to access his Coinbase account and was unaware of the status of the account." "During the five days between August 26, 2020 and August 31, 2020, Plaintiff sent several emails to Coinbase Customer Service, requesting that Coinbase clarify the status of his account."

"On or before August 27, 2020, Plaintiff was told by his mobile carrier, Sprint, that his mobile number was ported to an unknown third-party carrier."

As of February 18th, 2021, "the Plaintiff’s portfolio would be worth more than $400,000."

This exchange or platform is based in United States, or the incident targeted people primarily in United States.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Coinbase Sim Swapping Lawsuit

Date	Event	Description
August 26th, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.