Coinbase, the largest US cryptocurrency exchange, recently encountered a technical problem. This issue resulted in a hurdle from another major exchange, Binance. Here are the details…
OFAC notification arrived for Coinbase
A technical issue on the Coinbase side caused certain Bitcoin transfers from Binance to be blocked. Reddit and Twitter users shared posts late Tuesday announcing that attempts to transfer Bitcoin from Binance to Coinbase were blocked. It was stated that the transfers of the transactions were blocked because they came from an “OFAC-approved address”. So users were faced with a Foreign Assets Control Office (OFAC) notification. A Coinbase spokesperson acknowledged that this is a technical issue affecting less than 100 people and has been fixed. Coinbase has sent affected users an email stating that their deposit will be credited to their account shortly.
OFAC maintains a long list of crypto wallets and protocols that are classified as “specially designated citizens” and are sanctioned, meaning US-based entities are not allowed to interact with them. According to experts, a data entry error probably caused this problem. In August 2022, the cryptocurrency mixing service Tornado Cash (TORN) was also added to the sanctions list. Tornado Cash has been used repeatedly to alter and hide the destinations of hacked cryptos, including in North Korea. Coinbase is currently pushing for the US Treasury Department to end this move towards Tornado Cash.
The stock market is facing a lawsuit
Meanwhile, as we reported on Cryptokoin.com, a person named Jared Ferguson filed a lawsuit against Coinbase in the United States District Court for the Northern District of California on March 6, and after identity thieves took money from his account and Coinbase refused to pay him compensation, he had “percentage of his life savings.” He claimed to have lost “90”. Ferguson is said to be the victim of a type of identity theft known as “sim swapping”, which allows scammers to gain control of a phone number by tricking the telecom provider into linking the number to their sim card.
This allows scammers to bypass any SMS verification on an account. In this case, the exchange allegedly allowed the scammers to confirm the $96,000 withdrawal from Ferguson’s Coinbase account. Ferguson claimed he lost service after his phone was hacked on May 9, and realized that money had been withdrawn from his Coinbase account after he bought a new sim card and restored the app, per service provider T-Mobile’s instructions. The exchange stated in an email to Ferguson that “you are responsible for the security of your emails, passwords, 2FA codes and devices”, stating that Ferguson has no liability for any hacking of his account.
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