Is Coinbase the Next Target for North Korean Hackers?

Coinbase seems to be the target of North Korean hackers. The Federal Bureau of Investigation (FBI) in its recent Public Service Announcement has warned the crypto ecosystem of DPRK. The report discloses that North Korea is targeting crypto firms. They are famous for performing deep pre-operational research before launching an attack. They used to target DeFi projects, Dexs and Cexs. But have also done months long intensive research of firms linked to crypto ETFs.

Bill Hughes shared his concerns about the safety of ETF issuers. He said in his X post that it is very different that DPRK is now going for ETF issuers. Before crypto, these hackers spent years infiltrating banks around the globe. They follow money and now ETF issuers have that.

Crypto ETF issuers better have their security as tight as possible. DPRK is at the door.

“Going after ETF issuers is certainly different than their recent DeFi/CeFi/CEX targets, but I’m not sure it’s necessarily an escalation,” @tayvano_ said, using terms for centralised…

— Bill Hughes : wchughes.eth ? (@BillHughesDC) September 4, 2024

Eleanor Terrett, a famous FoxBusiness journalist, also shared her concern quoting Bill Hughes that Coinbase has become a major target for the malicious actors of DPRK.

This is a matter of high concern because 8 out of the 11 BTC spot ETFS and 7 out of 9 ETH spot ETFs are under the custody of Coinbase. This makes the custodian crypto exchange a shining target for the hackers.

In a further X post, Eleanor expresses that the SEC is discouraging fed regulated banks to take custody of crypto and that is why there are only a few firms that can do that. This makes ETFs more centralized and endangers the assets. She also emphasized that SAB 121 should be repealed.

This is case in point for why SAB 121 should be repealed. The @SECGov is discouraging federally regulated banks from custodying crypto, narrowing the custodian pool, thus making them more centralized and potentially vulnerable.

The government should WANT a federally regulated… https://t.co/8EULtwXK4q

— Eleanor Terrett (@EleanorTerrett) September 4, 2024

The Staff Accounting Bulletin No 121 or SAB 121 was released on March 31, 2022 by the SEC. It provides accounting guidance for companies that safeguard crypto assets. The aim is to ensure transparency and accurate reporting. This requires the firm to recognize both ; a liability for safeguarding assets and a corresponding asset on their balance sheet, measured at fair value. This can cause an extra burden on the Fed recognized banks because taking custody of crypto assets will also bring significant risks and complications.

It is very clear that Coinbase is at the aim of DPRK hackers because they have the highest number of crypto ETFs under its custody. Now the question arises, does Coinbase have the security measures and resources to safeguard the crypto assets?

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