So, the Coinbase hack. What happened? And why does the company expect a $400M loss?
Not three days after Coinbase became the first crypto company to enter the S&P 500, it got hacked. Big time.
The hackers bribed non-US (mainly India) Coinbase employees to hand over sensitive customer data (including names, dates of birth, and some banking information). They then asked the company for a $20M ransom to delete everything.
What did Coinbase do? Well, what does the most influential US crypto company that safeguards most of the $122B Bitcoin ETF reserves do?
It issued a $20M bounty for any information that leads to catching the cybercriminals, and promises to reimburse 100% of user losses, which are estimated to be in the range of $400 million.
Still, the damage was done, and major cryptos fell like dominoes after the news hit the headlines. Ripple dropped by 6%, and Bitcoin is now $104K, down from $105K.
This begs the question: is there a better way to safeguard your crypto? Yes, there is: non-custodial crypto wallets like Best Wallet.
Read on to find out all the details of the Coinbase hack.
Coinbase Hack: The What, How, Where, and Why
The cybercrooks had what they thought to be an infallible, four-step process:
Find employees and contractors based in India who had access to Coinbase’s outsourcing and support operations
Bribe them to hand over customer data, expanding the database significantly over several months.
Demand a ransom from Coinbase to delete the data or make it public if they don’t comply.
Profit.
Unfortunately for the hackers, less than 1% of Coinbase’s users were impacted. And the leaked information didn’t contain account passwords or, worse, seed phrases for the crypto holdings.
So, in effect, the criminals’ leverage was paper-thin.
Naturally, Coinbase did what Coinbase does – offer a guarantee to reimburse 100% of user losses and turn the $20M ransom against the hackers in the form of a bounty to catch them.
Major cryptos (including some of the best altcoins) lost some of their headwind the next day, on May 12.
Bitcoin lost 3.96% (going from a daily high of $105,493 to $101,311) and Ethereum dumped by 3.9% (from $2,559 to $2,459).
Overall, the total crypto market cap lost $100M following the Coinbase hack announcement.
Although significant damage was done, things could have been a lot worse. Users could have had their seed phrases leaked, which would have put their assets at risk.
And, depending on the potential extent of the losses (the company estimates current losses at $400M), Coinbase might not have been able to reimburse everything.
The realization, I’m sure, leaves plenty to be desired from Coinbase clients and crypto exchange users.
Which brings us to non-custodial crypto wallets, which are generally safer than custodial ones with exchanges, since you’re the one holding the keys. Best Wallet is one of the up-and-coming, which is currently undergoing a presale for the Best Wallet Token, its ecosystem token.
Let’s see what that’s about.
Own Your Crypto and Invest in Upcoming Presales with Best Wallet
Best Wallet is an anonymous, non-custodial, and multi-chain crypto wallet that’s currently expanding its Web3 ecosystem. The best part about non-custodial wallets is that exchanges getting hacked, like it happened now with Coinbase or with Bybit and FTX in the past, will have zero impact on you.
The wallet currently supports five blockchains: Ethereum, Binance Smart Chain, Polygon, Bitcoin, and Base. Support for over 60 chains is next on the roadmap, alongside advanced anti-fraud protection and the Best Card.
Best Wallet has been audited by Coinsult, and it has amassed over 63K followers on X. So, transparency, security, and community backing are all accounted for.
You can gain further benefits, like reduced transaction fees and higher staking rewards, and chime in on development decisions by getting into the $BEST presale, which raised over $12M to date. The token is currently priced at $0.025035.
So, $300 would get you 11,983 $BEST tokens, which you can stake for a 199% annual APY (35,829 or $896 in one year).
And consider that our $BEST price prediction sees $BEST increasing by 187% by the end of 2025 (from $0.025035 to $0.072). That could make your initial $300 worth $2,579 in less than seven months if you stake at the current APY.
To buy Best Wallet Token, head to the presale site, connect your wallet (or use Best Wallet), and click ‘Buy.’ Simple, easy, and affordable.
Are Non-Custodial Wallets the Future?
The Coinbase hack isn’t the first or last crypto hack we’ll see.
But it did happen to the most influential US crypto company, and the first crypto exchange to be listed on the S&P 500. So, while it does mean funds are still at risk if kept on exchanges, we don’t have to live with that.
Non-custodial wallets could become the norm in a not-so-distant future if exchanges don’t shift their approach to security.
Remember that investing in crypto presales is risky. The market is very volatile, and dumps can happen at a moment’s notice (like the Coinbase hack aftermath). Never invest more than you can afford, and always do your own research.
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