Coinbase Hack Exposed Crypto’s Biggest Security Risk… And It’s Not the Blockchain - Ep. 837
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Over the past decade, we have successfully implemented best practices around security in a number of different ways. You know, people are generally not getting hacked as often these days. You know, the exchanges are not getting hacked as often these days. But, you know, security is a constant cat and mouse game. And I think generally people in the security space would agree that right now the weakest link is in fact the brains of the people who are owning these assets. And so that's what social engineering is. Hi,
everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Every episode, we're featuring comments from all of you. Here are some remarks on the recent market making episode with Jose Macedo, Omarsha Key, and Taryn Sabarwal. On YouTube, RSL three wrote, a market maker having directional bias is crazy. Also on YouTube, One Was Now said, moral of the story, stay in your lane, leave a fast lane for insiders, vultures, scammers, influencers, etcetera. Let them steal from each other. If you want your comment featured, write one on YouTube, Farcaster, or
Good to be here. Hello. So
this morning, Coinbase announced that it had been extorted for $20,000,000 by cyber criminals who had bribed Coinbase customer service agents in India. The number of accounts affected is less than 1% of monthly transacting users or 84,000 as reported by Jeff Roberts of Fortune. Coinbase Prime users are not affected. So this attack seems to align with some reporting by Zach xBT and John t, aka Tanuki forty two on x, who is also a previous podcast guest, on what they call a 9 figure social engineering scam on Coinbase users. CEO Brian Armstrong published a video this morning in which he announce
is a flat circle. This has happened before, and it will happen again. So I'm not at all surprised that this has happened. And, you know, I'm sure we'll get into the details. I'm sure there are things that Coinbase could have done better. My primary gripe fundamentally is that companies like Coinbase are forced to take this very sensitive data, And and so they they have that responsibility thrust upon them basically by regulators, by, by the the laws of the land. And then, ultimately, the question is what do they do with the data? And it's a very, very hard problem because information wants to
what what are your thoughts?
Yeah. So I completely agree with with Jamieson. And, but I I I think I would add that, you know, in an organization, security is actually very much a human issue. A lot of people think that it's this complicated technical thing. And to some degree, getting your computer security right is a technical problem. But actually, I'd say 90% of it is having the right people at your company. And I think what we saw here was, Coinbase had just employees who were presumably in, you know, I would guess, low cost countries, easily bribed to steal customer information and share it. And, no no amount of adva
In the Fortune article, they said it was India, and they did talk to, the head of security, Philip Martin at Coinbase. So I'm assuming that information came from them even though the the actual blog post from Coinbase didn't identify the country. James, what about you?
My immediate first reaction was that he's doing the, the Mel Gibson ransom, strategy. I don't know if anybody remembers that movie where his child is kidnapped, and instead of paying the ransom, he says, I'm gonna pay this as a reward. So a a bold strategy, but I think what you're gonna hear from me is, a strong agreement with what's already come before, w
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