Before creating an account on an exchange like Coinbase and funding it with your precious crytposcurrencies, its important to know the safety provided. One question you should always think about is whether or not the place has been hacked in the past. Has Coinbase ever been hacked? This is a serious matter because if they have and have not made changes to their security system since then the vulnerability is still there.
In this short post I’m going to be going over everything you need to know about Coinbase and hacks…. whether it has been hacked, how to stay safe with Coinbase, security measures that need to be taken outside of Coinbase and more.
The Seriousness of Hacking & Cryptocurrency
With currencies that live solely in the cyber world hacking is a big concern. If you do not do things the smart way you could end up loosing all your funds to an unidentified individual who you never see, hear, or smell coming.
The world of cryptocurrency is full of hacks and massive amounts of funds being stolen, the most famous of which being the Mt Gox exchange hack which resulted in nearly 850,000 Bitcoins being stolen. There were 2 hacks total, the bigger of the 2 happening in 2014. And these were not Bitcoins that the exchange itself owned… these were Bitcoins that customers owned but that they entrusted Mt Gox to keep safe for them in their accounts.
Since the Mt Gox hack there have been plenty of other exchange hacks. Things have definitely gotten more safe since the early days but there is still a fair amount of danger in this realm. You have the Bitfinex hack in 2016 for ~120,000 Bitcoin, the Bitstamp hack in 2015 for ~19,000, and the Bitgrail hack in early 2018 with around 19,000,000 Nano lost. And of course these are just some of them.
So yes, hacking is serious matter and when you use an exchange you are entrusting them to hold onto your private keys and keeps your funds safe.
So Has Coinbase Ever Been Hacked?
The answer is yes and no…. but mainly no. What I mean by this is that NO, the Coinbase exchange itself has never been hacked and YES, Coinbase users accounts have been hacked, which isn’t all that rare of an occurrence.
When it comes to the exchange itself, Coinbase has a sterling reputation. They were founded way back in 2012 and are able to say that they have never been hacked. This really says a lot since they are one of the most popular exchanges out there and due to this probably one of the most targeted by hackers.
They have full control over your private keys to your cryptocurrency wallets. If you have been in the crypto space for any period of time then you probably know the private keys mean everything. They are the key of code that gives full access to the funds inside a particular wallet. And since Coinbase provides users with wallets to store their funds in, they hold these keys, as does pretty much every other exchange out there. This gives users easy access to funds and makes everything more streamlined but makes it so that you have to trust the exchange to keep things safe. And up through this point in time Coinbase has done exactly that… kept things safe.
Coinbase does a very good job with security but when it comes to keeping your account safe this is an entirely different story. Coinbase gives you the ability to keep your account safe but ultimately it is up to the user to do so. You are the one that makes your account password. If you choose the password ABC123 then that is your fault it is so horrible. And this is just part of it.
Keeping Your Coinbase Account Safe from Hackers
#1 – Make a Super Long Password at Random
Of course you want a nice long password. The longer the better. I always say at least 15 characters but if you want to make a password that is 30 characters then all the power to you. You should make a random password, not like Barbiegirl87. You don’t want it to make sense. I know this means it will be more difficult to remember but this is what you should do.
Back up the password on a piece of paper.
#2 – Enable 2 Factor Authentication (They call it 2-step verification)
2 Factor Authentication (2FA) is a standard when it comes to cryptocurrency exchanges. Its an added layer of security when it comes to getting access to your account. Coinbase used to have SMS based 2FA where they would send a code to your phone that you would have to enter before login, but they have since changed this to make things more safe.
Right now Coinbase allows users to synchronize their accounts with Google Authenticator. This is an app that displays a new 6 digit passcode every 30 seconds. When you go to login you will have to open up the app, enter this passcode and login before it times out. Once it times out a new passcode is generated.
If you do not enable 2FA then you need to right now. This makes things much more secure and is an easy step to take. This way has proven to be more safe then the old way they did things. With the old SMS 2FA it was actually possible (but rare) for hackers to be able to intercept text messages which could give them access to the account. But like I said, this is not the case anymore.
#3 – Make Sure Email Password Is Secure
If a hacker gets access to your email account then they will have a certain amount of control over your Coinbase account. Of course if you have 2FA set up, which you should, then they will still not be able to access your account with this alone, but they will be one step closer. And if you do not have 2FA set up then they can easily reset your account password and login as the owner.
Any way you look at it the password of your email account is very important and many times hackers will target email accounts to get access to other accounts rather than the account they are actually interested in getting inside. So just as your Coinbase account password should be long and hard for any hacker to crack, so should your email password.
#4 – Avoid Strange Emails
Its common for scammers/hackers to send out fake emails pretending to be a company. So just because an email tells you it is from Coinbase doesn’t necessarily mean it is. So be sure to check the incoming email address @coinbase.com. Scammers might misspell Coinbase or do something tricky to try to come off as the real thing when they are not.
If you do get emails like this do not even respond to them. Mark them as spam and do not worry.
What To Take Away From This
If you are really getting nervous about all of this then just calm down for a second. Like I said, the Coinbase platform itself has never been hacked. So the only thing that you really need to worry about is your own account safety. And although there have been plenty of people who have had their accounts hacked on Coinbase and any exchange, when you look at the big picture it isn’t quite as bad.
Think of it like this: Do you get scared walking down the street thinking that a martial arts master is going to give you a beat-down? The answer is probably not even though there are martial arts masters that could do such. The same applies to hackers. They usually don’t just target random people and the chances they will target you are probably extremely rare.
So take the security measures that I went over and you should feel pretty safe about things. Something else I suggest you look into is opening a “Coinbase Vault” if you have large amounts of cryptocurrency funds or are planning on holding onto your funds for a long time. The Vault is like the Wallet that Coinbase provides its users but more secure. You can read about this in the post I wrote Coinbase Wallet vs Vault.
For a complete overview of Coinbase you can read my full Coinbase review.
And as always, leave any comments or questions below. I’ll get back to you soon 🙂