Coinbase reveals that an additional $300,000 could have been sent to the hackers had the exchange not taken immediate action
A week after Twitter was crippled by the worst security incident in its history, which led to dozens of high profile accounts being compromised and a substantial amount of stolen Bitcoin, the investigations continue.
The hackers that managed to breach the social media networking site defrauded people of more than $100,000 worth of Bitcoin by using some of the accounts to promote a fictitious organisation called Crypto For Health, claiming to raise funds for community healthcare. Other accounts promised to double the Bitcoin that was sent to the link, which would then be returned to the sender.
However, data from Coinbase shows that the hackers had the potential to defraud much more out of the sting, with at least an additional $300,000 worth of BTC having been held back by the exchanges.
As the attack spread through the site on July 15th, Bitcoin exchanges worked with Twitter to prevent the hackers from receiving more of their stolen Bitcoin.
Twitter’s first step was to temporarily disable the capability to tweet for all verified users. Next, the site blocked all tweets that contained a Bitcoin address.
Bitcoin exchanges did their part by blacklisting the addresses that were linked to the hackers. This prevented money associated with the scam from moving between exchanges.
Coinbase chief information security officer Philip Martin revealed that the company had already observed an anomaly within the first few minutes of Gemini and Binance’s tweets. The two companies were early targets for the fraudsters, immediately before the Coinbase Twitter handle itself was compromised.
Martin revealed that only 14 Coinbase users were affected by the hackers. They managed to send around $3,000 in Bitcoin to the address before it was blacklisted by the company.
Gemini, Kraken, and Binance, have also confirmed that they have blacklisted the hacker’s address.
Chief executive of Kraken, Jesse Powell, assures users that exchanges are actively on the lookout for suspicious Bitcoin addresses such as the one shared on Twitter.
“The Twitter hack was a more widespread event, but scams of this nature are not new. Kraken proactively monitors for this type of activity and blocks certain addresses that we come across. Like any other scam, we proactively blocked the addresses from the Twitter hack earlier this week”, Powell said.
This move to blacklist select wallet addresses, even those that are under the control of hackers, have raised speculations in the community that major crypto exchanges could censor Bitcoin transactions that they deem undesirable.