• Coinbase denies responsibility for a user’s $96,000 loss due to an SMS text.
• The hacker managed to access and drain the user’s account 24 hours after receiving the prompt.
• Coinbase has refused to reimburse similar cases in the past and its stock price has been affected.
Coinbase Denies Responsibility for $96,000 Loss
Coinbase user Jared Ferguson from New York lost $96,000 due to an SMS message prompting him to change his password which allowed a hacker access to his account. Coinbase failed to flag multiple unauthorized transactions during this period causing Ferguson’s life savings of $96,000 to be lost. He filed a lawsuit against Coinbase in May 2022 claiming the company should bear responsibility for missing the unauthorized transactions on both Federal and State Laws but Coinbase sent him an email denying any responsibility and saying he is solely responsible for security measures such as passwords and 2FA codes.
Coinbase’s History of Refusing Reimbursement
This isn’t the first time Coinbase has refused reimbursement when it comes to security breaches; they denied reimbursing a similar case in 2021 when a user lost $7,500 due to a SIM Swap hack. This unethical practice has caused outrage on Crypto Twitter and also negatively impacted their stock price with a 2.7% decline over the last 24 hours at press time.
Base Layer-2 Blockchain Launched by Coinbase
In response to this issue, Coinbase CEO Brian Armstrong announced that Base Layer-2 blockchain might include transaction monitoring in compliance with regulatory requirements. This could help prevent scenarios like this one where customers have lost funds due to lack of security protocols being followed properly or suspicious activity not being flagged quickly enough by the exchange platform itself.
Future Regulatory Requirements
The tragedy involving Jared Ferguson’s losses serves as an important reminder of how important it is for exchanges such as Coinbase to follow all necessary safety protocols and adhere strictlyto regulatory requirements when it comes to handling customer funds. As regulations become stricter with regards digital asset trading platforms, companies like these will need ensure they are taking every possible measure so these types of incidents do not happen again in future.
Conclusion
It is clear that Coinbase needs take greater steps towards protecting its users‘ funds from cyber attacks if it wants stay competitive within crypto space going forward – especially as more stringent regulations come into place regarding digital asset trading platforms worldwide
