Coinbase has despatched out breach notification letters to more than 6000 buyers admitting they could have missing money in a months-very long campaign in opposition to the cryptocurrency exchange.
In the letter, the organization mentioned attackers took edge of a flaw in Coinbase’ two-component authentication (2FA) system to carry out various assaults among March and Could 20, 2021.
“As soon as Coinbase discovered of this issue, we up to date our SMS Account Recovery protocols to avoid any even more bypassing of that authentication approach,” notes Coinbase in the notification letter.
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Even as the exchange is investigating the incident, it has decided to reimburse all customers by depositing funds equal to the cryptos stolen from their accounts.
Sharing more details, Coinbase said that attackers would have required certain information associated with the customers account, such as their phone numbers, and login credentials.
The issue has been brewing for some time now. Unconfirmed reports of hackers accessing and draining the cryptocurrency wallets of Coinbase customers first surfaced in August. Then in September, the company had to reassure its users that the email they received about the change in their 2FA settings were sent erroneously.
While the exchange has admitted that it is “not able to determine conclusively how these third parties gained access to this information,” if it were to guess it’d say the details were inadvertently leaked by the customers as part of an elaborative and affective phishing campaign.
“Even with the information described above, additional authentication is required in order to access your Coinbase account. However, in this incident, for customers who use SMS texts for two-factor authentication, the third party took advantage of a flaw in Coinbase’s SMS Account Recovery process in order to receive an SMS two-factor authentication token and gain access to your account,” explained Coinbase.
In addition to reimbursing the funds, Coinbase will provide free credit monitoring service to customers, as it suggests users to use a different 2FA mechanism besides SMS-based one, and cycle the password of their Coinbase account, as well as of the associated email address.