Coinbase Extension
Coinbase works on a centralized infrastructure, meaning it’s a peer-to-peer network operating without the interference of intermediaries. Coinbase also offers educational materials.
Does Coinbase Extension pose any security risks?
The security risks that Coinbase customers should be aware of are the same threats that keep every existing online platform on its toes. The most prevalent security threats include:
Phishing and social engineering attacks. Hackers use deceptive emails, malicious links, and other elaborate techniques to convince unsuspecting users to give away their login credentials or sensitive information. With personal data at hand, cybercriminals can compromise a user’s Coinbase account and attempt to steal from their Coinbase wallet.
Data breaches. Coinbase is as susceptible to hackers’ attacks as any other company or online platform. If cyberattackers manage to gain access to Coinbase’s inner resources or user information, both user accounts, sensitive information, and other digital assets may be at stake.
Regulatory changes. Coinbase claims to comply with a number of regulations that secure the platform and its users from various threats. However, these regulations are subject to change, which can affect the platform’s operations and services, making them less convenient for users.
Third-party involvement. Like other crypto trading platforms, Coinbase uses third-party services to enable smooth operations. These may include partners for data processing, security maintenance, or cloud storage solutions. Dependence on outsourced service providers introduces additional risks because third-party vulnerabilities can compromise Coinbase.
Investment scams. Malicious entities can approach users with convincing but fake investment opportunities that may lure them into malicious schemes that will empty their crypto accounts.
Is Coinbase Extension safe?
Coinbase digital wallets are considered to be safe because they are non-custodial, meaning the company itself cannot access them. This type of blockchain wallet gives users full control over the private keys used to access their cryptocurrency.
The user has to create a master password to open their account, and only those knowing the password can access the funds. However, this security feature comes with a drawback – if the user ever loses or forgets their master password, they lose their access to crypto funds stored in the wallet.
Coinbase stores its user data, app information, and wallet addresses in offline wallets, less susceptible to online threats and hacker attacks than online ones. Users’ private keys are secured with AES-256 encryption, known for its high security level.
Remember that you should always keep your crypto in a self-custodial digital wallet rather than leave it on the exchange because your funds are more susceptible to online theft or fraud when left online.
Past security incidents and breaches
Over 11 years of operation, Coinbase has experienced two major data breaches. In 2021, cybercriminals detected a flaw in Coinbase’s account recovery process through SMS. Exploiting the vulnerability, they were able to gain access to at least 6,000 Coinbase accounts and transfer funds associated with them to external crypto wallets. Coinbase was quick to fix the security flaw and reimburse its customers.
The latest security breach was carried out in February of 2023 by a hacker group called 0ctopus. Cybercriminals sent SMS messages to Coinbase employees urging them to click a link and log in to their accounts to receive an important message. One employee believed this to be a legitimate request and gave their credentials.
However, hackers soon found out all employee accounts were secured with 2FA. Committed to carrying out the fraud, the hackers used voice phishing and convinced the employee to show them the dashboard with the company’s communication tools and employee contact information. However, the hackers were stopped by Coinbase’s security team before they were able to access customer data.
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