Independent Analyst Lambasts Coinbase For Security Lapses Resulting In $300 Million Theft

The crypto community might be safe and secure. However, there are still some chinks in the armour. In other words, even the biggest name in the game can have security lapses. One such giant is Coinbase itself. 

Coinbase might be riding waves of success due to the massive acquisition of Spindl and winning FCA over, but that does not mean that it is immune to scamming activities. In a recent turn of events, an independent analyst named Zachxbtlambasted Coinbase for its security lapses. 

The user delved deep into the topic and presented user reviews to highlight the lapse that roughly amounts to around $300 million annually.

Losing $300 Million Annually To Scammers 

Zachxbt used screenshots and other means to show the impact of the said scammers on Coinbase clients. The analyst claims that the bulk of these scammers hail from India and have been operating without any hindrance for a while with the help of Coinbase’s lackadaisical security measures. 

These scammers primarily use social engineering to get into Coinbase accounts and siphon funds out of it. Social engineering is a means of acquiring login details and other credentials with the help of deceit. 

Zach even highlighted that, at one point, scammers created replicas of the Coinbase website to scam people out of their finances. Therefore, the extent of the scam activity is huge, and a prompt response is needed.

In the last two months, scammers have reportedly siphoned $65 million through a social engineering scam. However, the more alarming point is that Coinbase is doing very little to curb such activities.

Zach said, “Coinbase needs to urgently make changes as more and more users are being scammed for tens of millions every month.” He further added, “Most of the fault lies on leadership.”

Such scathing allegations can tarnish the reputation of Coinbase as a brand.

Coinbase Response 

As soon as things hit the fan, Bitcoin.com got involved. The regulatory body urged Coinbase to look into the matter after Zach’s claims. Coinbase responded with a blog post claiming responsibility for the same and providing solutions for the points highlighted by Zach. 

Coinbase responded saying, “Social engineering attacks are responsible for the vast majority of losses suffered by our customers and this problem isn’t unique to Coinbase.” The organization further added, “In the past year, financial institutions have been experiencing a 10x increase in social engineering attacks targeting their customers.” 

The post did mention that Coinbase user credentials have been stolen and are circulating on the Dark web. Therefore, validating Zach’s claim. However, the post did not deny or agree to the $300 million figure. Yet, they included blockchain analytics from Chainalysis to showcase $4.6 billion in industry-wide losses.

The Final Thought: Questioning Security 

Zach’s bombastic claim might be written off as an independent analyst’s rant, but in actuality, it is much deeper than that. The post showcases the ease with which anybody can access confidential data and post it in a public forum. 

Therefore, this truly raises security concerns for future investors. Therefore, making it a contentious topic to understand and study. As a result, the question of security looms.