When cryptocurrency came about, few people thought it had any value. Today it’s an integral part of many people’s investing strategies. Crypto like Bitcoin and Etherum have continued to soar in value. Tap or click here for 12 questions you’re too embarrassed to ask about Bitcoin.
However, trading and investing in crypto is quite complicated, and you need digital wallets and exchanges to handle the currency. Exchanges like Coinbase have been widespread because their security was high, and the platform was user-friendly.
Unfortunately, Coinbase recently joined the millions of platforms that have been hacked. Read on to find out how thousands of crypto accounts were drained in the Coinbase hack and what will happen to your money now.
Here’s the backstory
Crypto remained a questionable investment for many years, and then PayPal jumped on the bandwagon. Since then, crypto has gone mainstream, being picked up by investing platforms like Robinhood, making it easier than ever to invest.
This mainstream movement has given crypto a banner year, with more people than ever giving it a try. Unless you are using a platform like Robinhood or PayPal, which is altogether easier, those looking to dabble in the world of crypto need a few things first.
Exchanges and Wallets
When buying crypto, you’ll trade cash for a digital option, like Bitcoin. You have to use an exchange like Coinbase to facilitate the transaction. With any online transaction comes risk, so we rely on exchanges like Coinbase to have top-notch security to keep it safe.
After you purchase your cryptocurrency through an exchange, you’ll need to store it in a digital wallet. There are multiple options, all with varying levels of safety. Sadly no wallet or exchange is exempt from being hacked, as we saw with the recent attack on Coinbase.
The Coinbase breach
In the last few days, Coinbase has reached out to over 6,000 users who had some, if not all, of their crypto funds completely drained by hackers. How did it happen?
While Coinbase has been able to identify that the attack occurred through a flaw in its 2FA system, it isn’t entirely sure how it happened. It does know that hackers would have needed vital information to complete the attack, like login credentials and passwords.
Its best guess is that the information was obtained through comprehensive phishing schemes to users over months. Evidence points to this being partly to blame after an email went out to Coinbase users in September, asking them to change their 2FA settings. An email Coinbase quickly denounced.
Was I affected and will I get my money back?
If you received an email from Coinbase about the hack, there’s a chance that your account was affected and you should double-check all your transactions immediately.
If your account was affected, you should notify Coinbase immediately to temporarily lock your account and contact its support team for further instructions. You can do this by clicking here.
If you didn’t receive an email, it doesn’t hurt to login into your account to verify that all your crypto is there and nothing suspicious has occurred.
Find something suspicious? Don’t panic. Coinbase has already agreed to replace the stolen crypto from the security breach by depositing equal coins into users’ accounts.
Crypto is like everything else
The overall lesson here is that nothing is safe online. With technology comes constantly evolving cybercriminals looking for ways to steal your personal information and money.
However, that doesn’t mean that crypto isn’t worth investing in. If you are nervous but still curious about investing in cryptocurrency, Kim has you covered. From wallets to exchanges to what coin may be the safest option, learn all about it in Kim’s eBook, Cryptocurrency 101.