How the Attack on Coinbase Shows the Dangers of Centralized Exchanges - Ep. 837

Unchained

Laura Shin

News, Tech News, Business News

4.5 • 1.3K Ratings

🗓️ 16 May 2025

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

Coinbase revealed on Thursday that cybercriminals bribed overseas customer support contractors to steal sensitive customer data as part of a $20 million extortion scheme. While no funds or private keys were compromised, customer names, addresses, and ID documents were exposed for nearly 1% of the company’s 8+ million “monthly transacting users,” according to a blog post. The story raises tough questions for the entire industry. Is KYC making users more vulnerable? Can human error ever be fully eliminated? And is crypto’s real security problem… people? Security experts Jameson Lopp, James Wester and Alexander Leishman delve into: What went wrong at Coinbase Why human vulnerabilities are still crypto’s biggest risk Whether KYC makes the problem worse What companies should do next to protect their users Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! Focal by FalconX Bitkey: Use code UNCHAINED for 20% off Mantle Guests Jameson Lopp, Co-founder and CTO at CASA James Wester, Research Director at Javelin Alexander Leishman, CEO and CTO at River Links Coinbase’s blog post: Protecting Our Customers - Standing Up to Extortionists Coinbase’s SEC filing Commentary: Vance Spencer’s tweet Armani Ferrante’s tweet Timestamps: 🎙️ 0:00 Introduction and ads 🔓 2:30 How hackers tricked Coinbase’s offshore support and why humans remain security’s weakest link 🗂️ 6:49 What customer data was leaked and how hackers use it 🎯 13:14 How attackers prey on targets at weak moments 🌍 20:47 Should Coinbase move customer support back to the U.S.? 🛑 26:35 Why KYC protocols might be making users more vulnerable, not safer 🛡️ 28:48 The best defenses companies can implement to protect users 📰33:49 Weekly News Recap Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Over the past decade, we have successfully implemented best practices around security in a number of different ways.
0:08.8	You know, people are generally not getting hacked as often these days.
0:14.4	You know, the exchanges are not getting hacked as often these days.
0:18.5	But, you know, security is a constant cat and mouse game.
0:21.0	And I think generally people in the security space would agree that right now the weakest link
0:26.7	is, in fact, the brains of the people who are owning these assets.
0:33.0	And so that's what social engineering is.
0:38.2	Hi, everyone.
0:39.2	Welcome to Unchained, your no hype resource for all things crypto.
0:41.9	I'm your host, Laura Shin.
0:43.9	Every episode, we're featuring comments from all of you.
0:46.8	Here are some remarks on the recent market making episode with Jose Macedo, Omar Shakiv,
0:51.5	and Taryn Suburwal.
0:53.5	On YouTube, RSL3 wrote,
0:55.9	A market maker having directional bias is crazy.
0:59.1	Also on YouTube, when was now, said,
1:01.6	moral of the story, stay in your lane,
1:03.8	leave a fast lane for insiders, vultures, scammers, influencers, etc.
1:07.4	Let them steal from each other.
1:09.2	If you want your comment featured,
1:10.6	write one on YouTube, Farcaster, or X.
1:12.6	I might read it on a future show.
	...

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