Crypto Exchanges Prevented Its Users from Sending at least $300k Worth of BTC to Twitter Hackers
Coinbase prevented more than 1,100 of its customers from sending more bitcoin to the scam promoted by Twitter hackers last week.
In the worst security incident, the major accounts were hacked to post a Bitcoin giveaway scam. The hackers were only able to scam less than 13 BTC worth $120,000 out of people. But it could have been much worse, at least $300,000 worth of bitcoin was held back by crypto exchanges.
The San Francisco-based crypto exchange prevented its customers from sending 30.4 BTC worth about $280,000 to this scam.
“We noticed within about a minute of the Gemini and Binance tweets,” said Philip Martin, Coinbase chief information security officer in an interview with Forbes. Both the exchanges were attacked just before Coinbase.
Only 14 Coinbase users were able to send $3k worth of bitcoin to the hackers before Coinbase blacklisted the scam bitcoin addresses.
“It was a vanishingly small group of Coinbase users that tried to send bitcoin to the scam address,” Martin said, adding the exchange often blacklists crypto addresses used by giveaway scammers.
The users of other exchanges reportedly attempted to send nowhere near as much funds as Coinbase users. Just like Coinbase, other crypto exchanges like Kraken also blacklist certain bitcoin addresses and “proactively blocked the addresses from the Twitter hack” earlier last week.”
“The principle that we want to pay attention to is harm reduction without reducing the underlying utility of the asset,” said Martin, adding the exchange has broad support in trying to “avoid people having money stolen when it's in our power to prevent it.”
The funds collected by the scam are currently on the move, 22% (2.89 BTC) of it was transferred to addresses “strongly” believed to be a Wasabi wallet. As we reported, the FBI has also jumped into the investigation, which is focusing on tracking the bitcoin address back to the attacker.
As we reported, Twitter has now also taken to block any post that has a bitcoin address.