May 15 2025

Coinbase data breach highlights significant vulnerabilities in the cryptocurrency industry

Coinbase‘s recent data breach, estimated to cost between $180 million and $400 million, wasn’t caused by a technological failure, but rather by a sophisticated social engineering attack. Cybercriminals bribed offshore support agents to obtain sensitive customer data, including personally identifiable information (PII), government IDs, bank details, and account information.

This highlights a critical breakdown in Coinbase‘s internal security, specifically in access control and oversight of its contractors. No cryptocurrency was stolen directly, but the exposure of such sensitive data poses significant risks to affected customers, including identity theft and financial fraud. The financial repercussions for Coinbase are substantial, encompassing remediation costs and customer reimbursements. The incident raises serious questions about the security practices within the cryptocurrency industry and whether the term “innovation” appropriately describes practices that expose users to such significant risks.

Impact and Fallout

While no cryptocurrency was stolen, the breach exposed sensitive customer information, such as names, bank account numbers, and routing numbers . This exposure poses risks of identity theft and fraud. Coinbase has estimated potential costs for cleanup and customer reimbursements to be between $180 million and $400 million. The breach has also led to increased regulatory scrutiny and potential legal challenges .

Broader Implications

This incident highlights a critical issue in the crypto industry: the reliance on human factors and inadequate security training. Despite advanced technological safeguards, human error remains a significant vulnerability. The breach was not due to a failure in technology but rather a breakdown in trust, access control, and oversight. It raises questions about the industry’s approach to security and whether current practices are sufficient to protect users .

Moving Forward

The Coinbase breach serves as a wake-up call for the crypto industry to reevaluate its security protocols, particularly concerning employee training and access controls. It underscores the need for robust security measures that address not only technological vulnerabilities but also human factors. As the industry continues to evolve, prioritizing comprehensive security strategies will be essential to maintain user trust and ensure the integrity of crypto platforms.

The scale of the breach and its potential long-term consequences for customers and the reputation of Coinbase are considerable, prompting discussions about necessary improvements in security protocols and regulatory oversight within the cryptocurrency space.

Coinbase faces $400M bill after insider phishing attack

Here are some countermeasures to prevent similar incidents from happening again.

To prevent future breaches like the recent Coinbase incident, a multi-pronged approach is necessary, focusing on both technological and human factors. Here’s a breakdown of potential countermeasures:

Enhanced Security Measures:

  • Multi-Factor Authentication (MFA): Implement robust MFA across all systems and accounts, making it mandatory for all employees and contractors. This adds an extra layer of security, making it significantly harder for unauthorized individuals to access accounts, even if they obtain credentials.
  • Zero Trust Security Model: Adopt a zero-trust architecture, assuming no user or device is inherently trustworthy. This involves verifying every access request, regardless of origin, using continuous authentication and authorization mechanisms.
  • Regular Security Audits and Penetration Testing: Conduct frequent and thorough security audits and penetration testing to identify and address vulnerabilities before malicious actors can exploit them. These assessments should cover all systems, applications, and infrastructure components.
  • Employee Training and Awareness Programs: Implement comprehensive security awareness training programs for all employees and contractors. This should cover topics like phishing scams, social engineering tactics, and safe password practices. Regular refresher courses are essential to maintain vigilance.
  • Access Control and Privileged Access Management (PAM): Implement strict access control policies, limiting access to sensitive data and systems based on the principle of least privilege. Use PAM solutions to manage and monitor privileged accounts, ensuring that only authorized personnel can access critical systems.
  • Data Loss Prevention (DLP): Deploy DLP tools to monitor and prevent sensitive data from leaving the organization’s control. This includes monitoring data transfers, email communications, and cloud storage access.
  • Blockchain-Based Security Solutions: Explore the use of blockchain technology to enhance security. This could involve using blockchain for identity verification, secure data storage, and tamper-proof audit trails.
  • Threat Intelligence and Monitoring: Leverage threat intelligence feeds and security information and event management (SIEM) systems to proactively identify and respond to potential threats. This allows for early detection of suspicious activity and enables timely intervention.

Improved Contractor Management:

  • Background Checks and Vetting: Conduct thorough background checks and vetting processes for all contractors, particularly those with access to sensitive data. This should include verifying their identity, credentials, and past employment history.
  • Contractual Obligations: Clearly define security responsibilities and liabilities in contracts with contractors. Include clauses outlining penalties for data breaches and non-compliance with security policies.
  • Regular Monitoring and Oversight: Implement robust monitoring and oversight mechanisms to track contractor activity and ensure compliance with security protocols. This could involve regular audits, access reviews, and performance evaluations.
  • Secure Communication Channels: Ensure that all communication with contractors is conducted through secure channels, such as encrypted email and messaging systems.

Regulatory Compliance:

  • Adherence to Data Protection Regulations: Strictly adhere to relevant data protection regulations, such as GDPR and CCPA, to ensure compliance with legal requirements and protect customer data.

By implementing these countermeasures, organizations can significantly reduce their risk of experiencing similar breaches and protect sensitive customer data.

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Tags: Coinbase, cryptocurrency


May 09 2023

7 Rules Of Risk Management For Cryptocurrency Users

Category: Crypto,Information Securitydisc7 @ 3:30 pm

Trading or investing in cryptocurrencies can be highly lucrative. But the extreme price movements often discourage beginners to buy cryptocurrencies. However, with a carefully charted risk management plan, it is possible to make gains and minimize losses.

Here are the 7 golden rules of risk management for cryptocurrency traders

Diversify your portfolio

One of the effective risk management strategies for a cryptocurrency trader is to diversify your portfolio. You must ensure that you put only some of the investments in a few carefully chosen cryptocurrencies, instead of putting all your money in just one. For instance, you might consider buying Kusama along with Bitcoin or Ethereum, after checking the Kusama Price on that day.

Set up your stop-loss orders

A stop-loss order, in simple terms, is a preset order that will sell a part or all of the holdings automatically if the cryptocurrency price drops to some extent. It works like a safety net that helps in minimizing the loss for you, provided the market moves against you. When you set stop loss orders, you can reduce the losses and protect the investments. You need to put stop-loss orders at the proper levels.

Use the proper position sizing

Position sizing plays a crucial role in risk management. Regarding position sizing, you need to allocate some specific trade amount in your portfolio. You have to use the correct position size to manage the risk well. You need to ensure that you do not take a lot of trouble on a single trade, as it can lead to a lot of losses. In simple terms, you need to raise only one to 2% of the complete portfolio on one trade, so even if there is a loss, it will not impact your portfolio to a great extent.

Set only realistic profit goals

When you have a clear profit goal at the back of your mind, you can manage risk to a great extent. You need to ensure realistic profit goals depending on the market trends and technical analysis. Avoid getting greedy when you are in the grade you set unrealistic high profits, which can lead to risky trading decisions. You have to ensure that you are disciplined, stick to the profit target, and lock in the gain at the right time.

Do your own research (DYOR)

Information and market sentiment play a crucial role in the cryptocurrency market, so you must have all the information regarding the trade and prices. When you have the correct information on the latest developments and news, you can trade well. To have the correct information, you must do some research on all the cryptocurrencies that you are trading, like the technology market capitalization trading volume and historical price performance.

Consider using leverage with care

Leverage makes it very easy for you to trade with a considerable capital amount, and it is eventually more than what you have. Leverage is both a boon and, of course, it can lead to huge profits and losses at the same time. 

Even though leverage can help in improving your potential income, it can also increase the risk of losses to a great extent. You need to use leverage with a lot of care and thoroughly understand all the risks involved before you consider implementing it in your strategy.

Lastly, you need to ensure that you keep your leverage high and have the right stop-loss orders whenever you are trading with leverage. This will help you in managing your risk well.

Manage your emotions

Emotions like fear or greed can have a significant impact on your decision-making process, and they can also lead to impulsive trading decisions. This can lead to risks unnecessarily, so it is essential for you to keep a check on your emotions and maintain a rational approach while you are trading. You need to ensure that you avoid making any impulsive decisions based on fear or greed and stick to your risk management plan. It is OK to take a step back and reconsider your emotions when you feel that your emotions are taking over. 

In short, risk management is a critical element of cryptocurrency trading, considering the volatile nature of the market. When you follow these rules for risk management, you can indeed reduce your potential losses.

Cryptocurrency Risk Management

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Tags: cryptocurrency, Cryptocurrency Risk Management


Aug 11 2021

Hacker grabs $600m in cryptocash from blockchain company Poly Networks

Category: CryptoDISC @ 11:06 pm

Remember Mt. Gox? Sure you do!

Although it’s usually said aloud as “Mount Gox”, as if it were a topographic feature, it actually started life as MTGOX, short for Magic: The Gathering Online Exchange, where MTG fans could trade cards via the internet.

The web domain was eventually repurposed for what was, back in 2014, the world’s biggest Bitcoin cryptocurrency exchange.

Mt. Gox was headquartered in Japan, holding what was then a mind-blowing $500,000,000 in other people’s bitcoins (BTC).

And then a strange thing happened: the money, or at least the bitcoins, vanished, just like that.

We’ve never really found out what happened.

Early suggestions blamed a cryptographic flaw known as transaction malleability, but sceptics argued that this sort of treachery, even if if were possible on such an epic scale, would be visible in the Bitcoin transaction record, also known as the blockchain.

Simply put, transaction malleability means that two different transactions can be rigged to have the same supposedly unique identifier. Crooked transactors could, in theory, fraudulently concoct duplicate-yet-different transaction pairs, and use these transactions to trick a naive exchange into thinking that something had gone wrong. Them the crooks could dishonestly repudiate one of the transactions in each pair and demand a refund.

Some experts say that Bitcoin and cryptocurrencies are just a scam; others say they’re “the most important invention since the internet.” It’s hard to tell who’s right.

Authored by Silicon Valley leaders from Google, Microsoft, and Facebook, Bubble or Revolution cuts through the hype to offer a balanced, comprehensive, and accessible analysis of blockchains and cryptocurrencies.

Tags: cryptocurrency


Jun 13 2021

FBI/AFP-Run Encrypted Phone

Category: Backdoor,Crypto,CryptograghyDISC @ 9:33 am

If there is any moral to this, it’s one that all of my blog readers should already know: trust is essential to security. And the number of people you need to trust is larger than you might originally think. For an app to be secure, you need to trust the hardware, the operating system, the software, the update mechanism, the login mechanism, and on and on and on. If one of those is untrustworthy, the whole system is insecure.

It’s the same reason blockchain-based currencies are so insecure, even if the cryptography is sound.

Tags: Australia, backdoors, cryptocurrency, encryption, FBI, law enforcement, trust


Nov 19 2020

Japan Inc to begin experiments issuing digital yen

Category: CryptoDISC @ 5:48 pm

More than 30 major Japanese firms will begin experiments next year towards issuing a common, private digital currency to promote digitalisation in one of the world’s most cash-loving countries, the group’s organising body said on Thursday.

Source: Japan Inc to begin experiments issuing digital yen



Japan experimenting with digital yen!
httpv://www.youtube.com/watch?v=l-hK_rcL08o






Tags: cryptocurrency, digital yen, Japan


Oct 21 2020

PayPal to allow cryptocurrency buying, selling and shopping on its network

Category: Crypto,CryptograghyDISC @ 10:36 am

PayPal Holdings Inc joined the cryptocurrency market on Wednesday, allowing customers to buy, sell and hold bitcoin and other virtual coins using the U.S. digital payments company’s online wallets.

Source: PayPal to allow cryptocurrency buying, selling and shopping on its network



PayPal to Allow Cryptocurrency Buying, Selling and Shopping on its Network ₿₿₿
httpv://www.youtube.com/watch?v=QdOvU6YzNbU&ab_channel=RulesForRebels










Tags: cryptocurrency, PayPal