After the recent report of Coinbase’s “black hole” debit card flaw was exposed last week, the losses for its customers continue to mount. And sadly, their non-native English customer service is failing to help. Now aside from the debit card issue, a new case of $1.2-Million-Dollars drained from a US user was reported Sunday.
“I honestly felt numb. I don’t even know how this was possible. I still can’t process all the emotions,” says Anwar Husain of his loss.
This describes how the Californian felt after finding out his API Key was compromised, leaving his account vulnerable to hackers.
On November 1st, the crypto-investor and co-founder of SmashTech woke up and logged into Coinbase account as he does everyday. However, that Tuesday his cryptocurrency balance was far different than it was the day before. It had fallen by over $1-Million-Dollars.
Completely shocked, Anwar did not see any cryptocurrencies that lost value. And he then began to check transaction records.
Coinbase Allowed 1000s of Unauthorized Trades
It would be in his account’s transaction history the Web3 entrepreneur would notice where the money went. There were over 11,000 trades performed in 5 hours.
Now Husain warns others using the crypto-exchange, “[I] want others to know this could happen to anyone.” .
The massive trading was done to break down Anwar’s tokens into smaller crypto brands. The $1.2-Million was likely used to influence cryptocurrency with a smaller market cap. Hackers have done this recently to pump tokens’ prices and pull profits.
Think of hackers as institutional influencers in cryptos.
The FBI have been called in to review the case. However, they cannot comment on the investigation.
Coinbase’s only response thus far to the SmashTech co-founder is ‘they are looking into it’ and will have a specialist review the case. If lucky, Husain’s case will qualify for reimbursement under the crypto-exchange’s Account Protection Program (AP) .
If the San Diego cryptocurrency investor is not signed up for Coinbase One, he will be instantly denied the reimbursement.
Sadly, this $1.2-Million-Dollars loss is only the tip of the iceberg when it comes to this particular crypto-exchange’s users losing money through hacks and other flaws. Hopefully the company will find suitable security to prevent such unauthorized transactions in the future.