Cryptocurrency exchange Coinbase began a large-scale fund transfer on Saturday, moving tokens to a new internal wallet in a scheduled routine security step to reduce the long-term risks of storing funds in the same publicly known wallet address.
The company said in a statement that the transition was not due to a cybersecurity breach or external threat. Coinbase stated:
“Migrating wallets on a regular basis is a well-accepted best practice to minimize outflows over time. This is a planned migration and is independent of industry changes or pricing conditions. This is not in response to a data breach incident or external threat.”
sauce: coinbase
This means that large Bitcoin (BTC), Ether (ETH), and other token balances move on-chain from Coinbase wallets to other internal Coinbase wallets that are already labeled by blockchain explorers and intelligence platforms.
Coinbase warned users that during the transition, scammers may impersonate Coinbase representatives and attempt to exploit the situation by contacting customers and requesting login information or requesting users to transfer funds, but the exchange will not do so.
This warning is a reminder that cryptocurrency users must remain vigilant against phishing attempts, hacks, scams, and other cybersecurity attacks in an ever-evolving threat landscape.
Coinbase will transfer your funds to other wallets managed by the exchange. sauce: arkham intelligence
Related: Coinbase 'doubles down' on Solana with latest DEX acquisition
Idle balances can be honeypots for hackers: Why moving funds regularly is a best practice
Hackers target centralized servers, information systems, and hot crypto wallets connected to the internet to extract information and value from users.
These centralized repositories containing vast amounts of information and tokens are attractive to attackers. Attackers often plan these attacks for months and view large, centralized systems as honeypots.
The advent of artificial intelligence and AI-powered tools also gives hackers an advantage in assembling heuristic clues through publicly known information and other metadata that could compromise or lead to theft of sensitive information, cybersecurity experts told Cointelegraph.
Quantum computers also pose a threat to current cryptography, which may be in the not-too-distant future, but retroactively already, Gianluca Di Vera, a researcher in smart contracts and zero-knowledge (ZK) proofs, told Cointelegraph.
Until sufficiently powerful quantum computers are invented, threat actors may currently be compiling cryptographic public keys.
The quantum computer can then derive the private key from the public address in a “harvest now, decrypt later” attack, Di Vera told Cointelegraph.
Di Vera said cryptographic protocols need to switch to post-quantum security standards as soon as possible to neutralize the threat of retroactive hacking.
magazine: Real-world AI Use Case in Cryptocurrency, Part 3: Smart Contract Auditing and Cybersecurity
