Aug 2021 - Coinbase Vidovic Account Sim Swap - $169k (United States)
"Coinbase is a secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more." "As the leading mainstream cryptocurrency exchange in the United States, Coinbase has become a standard on-ramp for new crypto investors. Coinbase offers a wide variety of products including cryptocurrency investing, an advanced trading platform, custodial accounts for institutions, a wallet for retail investors, and its own U.S. dollar stable-coin."
"Coinbase was founded in 2012 and is a fully regulated and licensed cryptocurrency exchange supporting all U.S. states except Hawaii. Coinbase initially only allowed for Bitcoin trading but quickly began adding cryptocurrencies that fit its decentralized criteria." "Its list expanded to include Ethereum, Litecoin, Bitcoin Cash, XRP, and many others with the promise of more as long as its requirements are met."
"The ability to port your SIM card to another device is a service that mobile carriers provide to their customers. It allows a customer to request their phone number be transferred to a new device. In most cases, this is a perfectly legitimate request; this happens when we upgrade to a new phone, switch mobile carriers, etc."
"A “SIM port attack”, however, is a malicious port performed by an unauthorized source — the attacker. The attacker ports your SIM card to a phone that they control. The attacker then initiates the password reset flow on your email account. A verification code is sent from your email provider to your phone number — which is intercepted by the attacker, as they now control your SIM card. The diagram below outlines the attack step by step."
"[Tampa Firefighter Tanja Vidovic] and her husband Jared, who is a VA nurse, started investing in cryptocurrency three years ago after hearing about the high rates of returns from friends." "Tanja and Jared Vidovic jumped into cryptocurrency investing in 2017 and watched their funds nearly quadruple over four years."
“We were aware this was a riskier investment, but you don’t expect to wake up one morning and find that it’s completely gone,” Jared Vidovic said. “I looked into Coinbase, and it seemed like it was one that everybody used and trusted,” Tanja said.
"But in late April, Tanja, a firefighter, opened her computer to a barrage of security alerts and password change notifications."
"The Vidovics lost nearly $170,000 in the blink of an eye when someone hacked their Coinbase account." "For Tanja Vidovic, it was a moment of panic: She had received a series of alerts about someone changing access to her cryptocurrency account. And she realized, as she stared at her computer screen, that nearly all of her $168,000 in holdings was gone — vanished before her eyes."
"Criminals hacked the Vidovics’ Coinbase account using something called a “SIM swap.”"
“I noticed that all of the sudden my phone stopped working, the internet stopped working,” Tanja said.
"Someone contacted Tanja’s cell provider Cricket Wireless, pretended to be her and had her SIM card — containing her pictures, contacts and apps — electronically transferred to a new phone."
“When they did the SIM swap they switched over email addresses to make their email to be the back-up and my phone number is now their phone number,” Tanja said.
"That allowed the crooks to use two-factor verification to access her Coinbase account."
“They were able to make these changes and transfer all of our money via this app over to their wallet in an instant,” Tanja said.
“And then eight hours later, after you noticed it, you notified Coinbase and their response was none of the transactions can be frozen or reversed,” Jared said.
“The money we were looking forward to after we retire is gone. Probably two-and-a-half years of my salary is gone,” said Tampa Firefighter Tanja Vidovic. “All these people who are investing think their money is safe and it’s not,” Tanja Vidovic said.
"The Vidavics received messages from Coinbase saying the company wasn’t responsible for their losses."
“Because this attack was not the result of a breach of Coinbase security or our systems, we cannot reimburse you for this loss. This attack was only possible because the attacker had prior access to your email account and access to your 2-factor authentication codes (meaning they had access to your phone number through a SIM swap) before they attempted to access your Coinbase account,” the email said.
“How are they getting away with this?" Tanja Vidovic said. "Hundreds of thousands of dollars, millions of dollars are being stolen from Coinbase and they literally don’t even have a fraud department that you can talk to. It’s infuriating."
"Coinbase acknowledges that these are terrible crimes that can have a significant impact on consumers. With more and more of our personal information available online, it is increasingly important for consumers to understand how to protect their personal email accounts and cell phones from unauthorized third parties. Once a third party gains access to a consumer’s email or phone, that consumer’s other online accounts may also be at risk. That is why Coinbase regularly works to educate our customers about how to protect their personal email accounts and phones -- it is the most important thing they can do to prevent unauthorized access to all of their online accounts, not just Coinbase. Coinbase takes extensive security measures to ensure our customer accounts remain as safe as possible. Our customers have never lost funds due to a security breach of our platform. In addition to educating our customers on best practices for securing their Coinbase accounts, Coinbase has a dedicated fraud investigations team and policy to ensure specialized support for our customers. The team is responsible for providing a coordinated approach to the identification, investigation, and resolution of fraudulent activities on the Coinbase platform. Because of these steps, unauthorized access to a Coinbase account remains extremely rare. When Ms. Vidovic and Mr. Blumetti emailed our support team to report possible unauthorized activity in their accounts, in both instances Coinbase responded within minutes and immediately locked their accounts to prevent any further unauthorized activity. Coinbase also offered step-by-step directions to both Ms. Vidovic and Mr. Blumetti to reconfirm identities and further secure their accounts. We are still in contact with both Ms. Vidovic and Mr. Blumetti at this time. Coinbase thoroughly investigates all incidents of unauthorized access to a Coinbase account, including Ms. Vidovic’s and Mr. Blumetti’s accounts."
Further Analysis
Coinbase is the largest exchange platform in the United States. Cryptocurrency investors Tanja and Jared Vidovic had grown an investment to nearly $170k, and secured their accounts with SMS-based two-factor authentication. The attacker was able to trick their cell phone provider into switching the phone service to a new phone, which they controlled. They used the phone access to gain entry into the account and subsequently drained all funds. Tanja and Jared had no assistance available to help.
How Could This Have Been Prevented?
It's recommended that platforms use factors that involve physical hardware, and more factors are always better to authenticate users. Another strategy is to prevent withdrawals from accounts within a longer time period whenever a password is changed or there's a login from a suspicious location. All of these methods can effectively reduce the ability to perform these types of attacks. The responsibility and incentive are shared between platform and user to prevent these situations.
More Cryptocurrency Exchange Hacks/Scams/Frauds
Dot Finance Minting Vulnerability > > < < OpenSea Fake Support Accounts
Sources/Further Reading
Cryptocurrency accounts wiped out 'in an instant' by cyber crooks (Apr 10)
Coinbase Review 2021 (Aug 6)
Crypto firm Coinbase valued at more than oil giant BP - BBC News (Aug 6)
https://www.coinbase.com/ (Dec 4)
https://www.coinbase.com/about (Dec 4)
Morioh (Dec 4)
SIM-Swap Attacks Are On The Rise: How To Protect Your Crypto? (Aug 6)
As SIM Swap Attacks Amplify, Companies Recommend against Using SMS as 2FA | BTCMANAGER (Aug 6)
https://blog.coinbase.com/what-you-need-to-know-about-sms-phishing-attacks-371922915af4 (Dec 4)
https://www.cnbc.com/2021/08/24/coinbase-slammed-for-terrible-customer-service-after-hackers-drain-user-accounts.html (May 22)
Hackers drained their Coinbase accounts. The victims want answers. (May 22)
https://micky.com.au/coinbase-account-hacked-and-drained-of-170000/ (May 22)
» Cryptocurrency accounts wiped out ‘in an instant’ by cyber crooks (May 29)
What To Do When Sim Swapping Happens To You (Oct 14)
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