Is Coinbase Safe? Protect Your Crypto Investments in 2024

September 25, 2021 By Nancy William No Comments 11 minutes

Is Coinbase safe? As a crypto investor, how do you set aside those lingering thoughts about Coinbase and its risks–especially when the web is flooded with Coinbase security nightmares?

Coinbase is a leading cryptocurrency exchange in the United States and the world. It offers a comprehensive platform for advanced trading and investments, but is Coinbase safe to use and if it is, how safe is Coinbase? Keep reading our guide to explore Coinbase security and ways to keep your account secure.

Table of contents

• What is Coinbase?
• How Does Coinbase Work?
• What Coins Are Available on Coinbase?
• Is Coinbase Safe?
• Recent Cases of Coinbase Leaks
• How to Keep Your Coinbase Account Secure
• 7 Signs of a Coinbase Phishing Attack
• My Coinbase Account Was Hacked: What to Do After
• The Final Verdict: Is Coinbase Secure?

Note: You must use a VPN for Coinbase to ensure added account security. However, remember that Coinbase flags VPN usage as suspicious activity, as hackers may often use them to mask their malicious activities. To avoid this suspicion, ensure using a premium VPN that never falls under the radar. We recommend FastestVPN for its robust security and affordable plans.

What is Coinbase?

Coinbase is recognized as a top-leading cryptocurrency exchange in the United States and worldwide! In fact, it’s one of the best Bitcoin wallets to date. It offers an advanced crypto trading platform as a secure crypto wallet for investors, where users can make crypto payments.

It has a staggering global audience of 56 million, but despite the large pool of users, Coinbase risks remain a nightmare for crypto investors. And, the CNBC report covering a Coinbase user story might raise the hair on the neck.

How Does Coinbase Work?

You can trade 240 crypto assets and 300 different pairs on Coinbase. But, “Is Coinbase secure?” Here’s how it works. This app operates like a stock trading platform, where you can:

• Track crypto portfolios
• Check the varying cryptocurrency prices
• Spend, stake, and trade crypto
• Check market trends
• Secure your crypto
• Engage in pro-level buying and selling
• Trade NFTs

While this all sounds cooler than popping the bubbles of a bubble wrap–there’s another side to Coinbase accounts, and that’s what attracts major concern, too.

Since you’re entering your legal information, documents, address, social security number, and a never-ending list, Coinbase knows almost all about you, and that’s where things take a turn. If you’re under the radar of a hacker, it can be a problem.

What Coins Are Available on Coinbase?

Brace up for a “longgg” (yeah, very dragged) list of accepted Coinbase crypto coins:

Is Coinbase Safe From Hackers?

Here comes the million-dollar question: Is Coinbase safe and is Coinbase secure? Starting with the technicalities, according to Coinbase, it complies with MSB, AML, and KYC. Its security features include:

• Cold storage security
• Hot wallet insurance
• SOC 1 and SOC 2 Compliance
• AES 256-bit encryption
• TLS (Transport Layer Security) for data in transit security
• Mandatory 2FA
• Third-party penetration testing
• Bounty program to incentivize ethical hacking

While the aforementioned security features list is quite compressed, the original document on the Coinbase website makes it look almost impossible for the platform to be unsafe. Despite that, there are rising stats about leaking Coinbase security, which might make you doubt at the question of “Is Coinbase secure?”. That said, here are the pros and cons of Coinbase:

Recent Cases of Coinbase Leaks: Is Coinbase Safe to Invest In?

Now that you know about “Is Coinbase secure?” Here are the 3 recent cases of Coinbase leaks:

1. The Two-Factor Authentication System Breach (2021)

According to IDStrong, in 2021, over 6,000 Coinbase users fell victim to a breach that exploited the platform’s SMS-based two-factor authentication (2FA) system. Hackers leveraged a flaw in the SMS Account Recovery process to intercept 2FA tokens and gain unauthorized access to accounts.

As a result, users lost their:

• Login credentials
• Exposure of personal data
• ID names and email addresses
• Phone numbers
• Financial balance and transaction histories

Coinbase mentioned phishing and social engineering techniques leading to this breach and worked on addressing the vulnerability.

2. The Vidovics’ $170K Cryptocurrency Hack on Coinbase

Despite that, ABC Action News investigator Adam Walser reports that in various instances, cyber-criminals have drained user accounts instantly. Following that, he mentions that these funds aren’t recoverable. One of the named victims was couple Tanja and Jared Vidovi,c who lost 3 years’ worth of cryptocurrency investments, a total of $170,000.

3. SIM-Swapping Vulnerabilities: Cody Brown and the 2017 Coinbase Breach

In 2017, both victims, Adam Dachis and Cody Brown, resorted to Coinbase “security measures” of Two Factor Authentication and Authy. However, all results of security precautions were in vain as their accounts were still hacked robbed, and still no signs of being refunded.

There really is no real solution to stopping the overall hackings from happening on Coinbase, but that does not mean users should sit by and do nothing about it. There are still ways for you to secure your crypto wallet and slow down the overall theft rate.

How to Keep Your Coinbase Account Secure

Coinbase boasts robust security features, yet the data breaches say otherwise. That said, here are 8 ways to keep your Coinbase account secure:

1. Use Unique Email Addresses

If you create an account for Coinbase, make sure you sign up using a separate and unique or unidentifiable email address. Never use the same email ID as other media accounts.

2. Setup Hard-To-Guess Passwords

Longer or complex passwords are the right direction to go in, and just in case you’re not sure about how to create them, maybe the best password manager could help.

3. Setup Two-Factor Authentication

It is necessary to set up two-factor authentication and a Coinbase vault for offsites.

4. Avoid Discussing Crypto Accounts Online

Make sure you don’t discuss anything about cryptocurrency online and the possibilities of you creating your account.

5. Use a Do Not Port SIM Card

Using a “do not port” SIM card prevents your phone number from transferring to another SIM card without rigorous identity verification. However, ensure beforehand that your mobile carrier supports this request.

6. Disable SMS 2FA

Turn off the SMS 2FA just in case it leads to an attack and compromises your email. Moreover, doing so prevents the risk of phishing attacks, message interception, susceptibility to SIM-swapping attacks and account recovery exploits.

7. Centralize Your Crypto Investments

To avoid your Coinbase account from getting hacked through your computer, it might be wise not to keep all your cryptocurrency investments in one place.

8. Store Bitcoins in a Cold Wallet

Cold Wallets aren’t connected to the internet, making them immune to cyber threats. These ensure full control over your private keys, which are crucial for accessing and managing your Bitcoin. That said, ensure storing all your cryptocurrencies in a Cold Wallet.

Coinbase is most certainly not 100% secure, as no software or app is. That’s why we recommend taking active precautions in any way you can.

7 Signs of a Coinbase Phishing Attack

Now that you know about “Is Coinbase secure?” Detecting a phishing attack is never a piece of cake. However, here are the 7 common signs of a Coinbase phishing attack:

1. Urgent Tone

Here’s the first sign of a phishing attack: an urgent tone. It can be a discount, an offer, or a too-good-to-be-true deal that pressurizes you to act urgently. Before you even know it, the black hats get to access your account details.

2. Requests for Sensitive Information

Speaking about “is Coinbase secure?” Coinbase never asks for your personal information, such as login credentials and account details. If you’re getting any such requests–that’s a red flag!

3. Suspicious Email Addresses

Coinbase will contact you via its official or, at least, a formal email address ending with “@Coinbase.com.” However, any other unverified address can be a scammer.

4. Excessive Grammatical Errors

You never expect a professionally written email with over a hundred Grammarly runs from a scammer. Most phishing emails are quite poorly written, with excessive grammatical errors, along with the above-mentioned signs.

5. Giveaways or Unexpected Transactions

Most phishing emails claim that you’ve received unexpected funds or promising giveaways. These will require either some data to be revealed or require verification for the steps to recover your Coinbase account as instructed.

6. External Website Redirections

If it’s Coinbase emailing you, why would you get redirected to another external website upon clicking any email link? That’s a major red flag! Doing so will leak your credentials and other sensitive data in no time.

7. Unusual Communication Channels

Coinbase doesn’t use instant messaging apps, like Facebook Messenger, WhatsApp, etc, to contact you. Instead, it will be via a verified email.

My Coinbase Account Was Hacked: What to Do After

There’s no guarantee that a compromised Coinbase account’s funds will return to your bank account. If you think your Coinbase account was hacked, then follow the steps below to secure it as soon as possible. Here are 9 steps to take if your Coinbase account was hacked:

1. Lock Your Account Immediately

Check if you can access your account. If yes, then log in to Coinbase and go to “Lock My Account.” Contact Coinbase customer support to freeze your account from any further unauthorized access.

2. Review Coinbase Accounts

After locking the account, review your accounts and check the bank statements to check for any signs of fraud. In case there are any unfamiliar transactions, file a report via Coinbase and the bank.

3.  File a Report

Contact Coinbase support via the site, app or its email. Request for filing a report by providing all your relevant details, such as timestamps of unauthorized activity and proof of ownership of your account.

4. Contact Your Bank

Contact your bank, which is connected to the Coinbase account, and inform them about the breach. Request a fraud alert and block or replace the compromised cards.

5. Replace SMS-based 2FA

Replace the current SMS-based 2FA with an authenticator app like Authy or Google Authenticator for improved security. But, if the previous 2FA is compromised then remove the previous phone number connected to your Coinbase account.

6. Change Your Password

If you can still access your account, then immediately change the password to a new, unique and complex one. Avoid reusing passwords across accounts.

7. Report the Theft to Authorities

Notify the local law enforcement, such as:

• Federal Trade Commission (FTC)
• FBI’s Internet Crime Complaint Center (IC3)

Doing so will document the incident and assist with potential recovery efforts

8. Scan Devices for Malware

Run a malware scan on all devices connected to Coinbase to check for file and fileless malware. Remove all suspicious files if the antivirus detects destructive malware or infected files. You can also reset your device but ensure that you back up the data before doing so.

9. Transfer Remaining Funds to a Secure Wallet

If there are any funds left in your account, then consider transferring them into a secure wallet.

The Final Verdict: Is Coinbase Secure?

This guide briefly covered the question, “Is Coinbase safe to use?” Conclusively, yes, it is. Considering its robust security features, it seems to be a secure platform. However, the recent Coinbase breach cases say otherwise.

As a recapitulation, it’s safe as long as you mitigate the cyber threats by following all the steps outlined in this guide to protect your Coinbase account. That said, ensure that you connect to a reliable VPN, like FastestVPN, for improved cybersecurity when trading crypto on Coinbase.

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