Coinbase has been expanding its horizon by acquiring firms and moving places and in a recent collaboration with Xapo has made Coinbase, the biggest crypto custodian in the whole world. They now have the custody of more than 800,000 bitcoins which are worth $7 billion.
But in a recent blog post, they revealed the news that makes the new clients, as well as Xapo, question the choice they have made. Coinbase announced on 16th August that passwords of about 3500 users were compromised because of system vulnerability.
This error meant that the name, information, and password of the person was getting stored in a plain text document which could’ve been accessed by hackers. They claim that no data was stolen or lost, but they have asked the affected 3500 customers to change their passwords to be on the safer side.
This irresponsibility towards user security can bring a bad name for the company, especially when they’ve added so many new users and a lot more Bitcoins with the Xapo deal. The company has fixed the problem, but an issue like this should’ve been taken care of before.
To avoid further problems, Coinbase will have to tighten up their security and keep track of the things that happen within the company. Checks on the security procedures and updation of the system at regular intervals should be done. This negligence with security can lead to customers opting out of their services to ensure their safety.