Cryptocurrency exchange Coinbase has been a popular platform for buying and selling crypto assets. However, hackers are draining customers’ accounts without anyone noticing it until news outlets like CNBC reported about the cryptocurrency theft on their site. Many investors fear that they will lose all their money if this continues to happen with no action from Coinbase as there is little trust between them right now. According to the CNBC report, Coinbase users have filed more than 11,000 complaints against Coinbase with the Federal Trade Commission and Consumer Financial Protection Bureau, mostly related to customer service.
Cryptocurrency enthusiasts who have experienced problems mainly report their accounts being taken over then depleted. hackers tend to opt for easy access through SIM Swapping as a way of hacking into user’s data and taking advantage of them financially. To avoid this vulnerability with your phone carrier, you can request that they institute the best practices around preventing these attacks such as notifying customers immediately after an attack has occurred along with revoking authentication codes sent via text message just in case something goes awry when verifying customer identity during transactions or login attempts.
Coinbase has a serious communication problem. They only have one way of communicating with customers, and they can’t seem to keep up. Leveraging only email as a means of communication with customers is limiting. Another problem that Coinbase faces in customer service is the volume of messages they are receiving from their users, which has become unmanageable. These problems have left their customers in anguish as they search for answers on what happened to their funds and what to do next.
Unfortunately, Coinbase is not seeking to reimburse users who have suffered in the aforementioned manner due to the attacks not being a breach of Coinbase security but that of their users. They persist against restoring customer account balances in that they are unable to institute chargebacks due to the nature of blockchain transactions. The good news is the exchange has vowed to do better but they have left that action to take place sometime in the future. They have also made similar claims when it comes to the equal employment practices of their employees, but still waiting to hear an update on this. In the meantime, let this be the cautionary tale to us all to continue to remain vigilant and research best practices on how to secure our crypto assets.
Kamal Hubbard is a lawyer by training who is certified in Fraud Examination, Cybersecurity, and Decentralized Finance.