The letter was sent months after customers started complaining that their accounts had been wiped, with CNBC reporting that the cryptocurrency exchange platform, which has 68 million users, had been criticised for lack of action regarding the heist.
Late last week, Coinbase confirmed that, between March and May 2021, 6,000 US customers had fallen victim to “a third-party campaign to gain unauthorized access to the accounts of Coinbase customers and move customer funds off the Coinbase platform”.
The funds were transferred to crypto wallets unassociated with Coinbase, the company stated in the letter, making the transactions impossible to retract. Some customers reported losing even $168,000 (£123,655), according to CNBC.
Not only did the threat actors manage to steal hundreds of thousands worth of cryptocurrency, but they also obtained personal information such as “full name, email address, home address, date of birth, IP addresses for account activity, transaction history, account holdings, and balance”.
The hackers managed to exploit “a flaw in Coinbase’s SMS Account Recovery process in order to receive an SMS two-factor (2FA) authentication token”.
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However, in order to log in to users' accounts, they would also need information such as an email address, password, and phone number associated with the account, as well as access to customers’ email account.
Coinbase told the victims that it was “not able to determine conclusively how these third parties gained access to this information”.
However, the company pointed to the probable “phishing attacks or other social engineering techniques to trick a victim into unknowingly disclosing login credentials to a bad actor”.
“We have not found any evidence that these third parties obtained this information from Coinbase itself,” it stated in the letter, which was sent around six months after the breach took place.
Victims of the heist will be reimbursed, Coinbase said, adding that “will ensure all customers affected receive the full value of what [they] lost”. Customers were asked to change their passwords to a stronger combination that hasn’t been used on different sites.
The company is also working with law enforcement to investigate the issue, describing the status of the investigation as “ongoing”.
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Having only graduated from City University in 2019, Sabina has already demonstrated her abilities as a keen writer and effective journalist. Currently a content writer for Drapers, Sabina spent a number of years writing for ITPro, specialising in networking and telecommunications, as well as charting the efforts of technology companies to improve their inclusion and diversity strategies, a topic close to her heart.
Sabina has also held a number of editorial roles at Harper's Bazaar, Cube Collective, and HighClouds.