How Secure is the Bitcoin Wallet Coinbase?

Coinbase is one of the world’s most popular bitcoin wallet touting an impressive 2.1 million users since its short inception in June 2012. Their face-paced growth has made it the target of proponents, critics, and now, cybercriminals. A suspicious email has recently been sent to an unknown number of Coinbase users, advertising an investment product with a guaranteed return of 150%. The emails were sent from news@coinbase.com with the subject line, “We’ve got a message for You.”

The contents of the email are riddled with grammatical and syntax errors, an early warning sign that it may be fraudulent. As the email progresses, the reader pitched an opportunity for “risk-free” deposits which are “insured by the New York Stock Exchange.” The author likely meant to write “insured by the Federal Deposit Insurance Corporation.” The FDIC is the actual agency that insures banks and other lending institutions whereas the NYSE is a platform for trading and, in fact, does not ensure investments.

Poor Quality, But.

Despite the poor quality of its content, the fact remains the author was able to create an address that appears authentic and gain access to user email addresses in order to execute his scheme. Coinbase has verified that the email is NOT authentic as it did not come from them. Coinbase was reassuring in their email reply to CCN.com:

“We’re aware and have taken immediate action to address the phishing attack, which is now resolved. No Coinbase customer data has been compromised.”

They acknowledge that there was an attack, but claim that no user data has been compromised. At the time of this writing, the attack occurred only three hours prior, not nearly enough time to conduct a thorough investigation. Many users have indicated they do not have accounts with Coinbase, collectively agreeing the perpetrator must come have gained access to the emails some other way.

In the event a security breach at Coinbase would occur, an insurance policy is in place that would restore,

“the average amount of bitcoin stored online at any given time.”

The policy has been in place since November 2013. It would become effective, “in the event of a breach of our physical security, cybersecurity, or as a result of employee theft.” While all of this is reassuring, it is important to note that 97% of customer funds are stored offline.

Jonas Borchgrevink edited this article for CCN.com. If you see a breach of our Code of Ethics or find a factual, spelling, or grammar error, please contact us.

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