On February 11, two days before the $14 million color-changing Super Bowl and Coinbase was announced, an engineer desperately tried to contact Coinbase’s development and management team.
Tree of Alpha found that “a bug in the new advanced trading feature will allow an attacker to sell BTC or any other currency without owning it.” A flaw in the code could bring “nuclear weapons” to market.
Commenting on the bug, The Tree of Alpha told Cointelegraph that “the vulnerability itself was a concern” and shared that “some oversight from both the development team and the QA/Test team is necessary for this to happen.”
“Although the advanced trading product was not available to everyone and was still in beta testing, a large number of users could use this exploit.”
However, thanks to the hack’s quick reaction and “overwhelming social response,” the danger was averted, and Coinbase was able to avoid a “potential crisis.”
As usual, there is a bonus for breaking the white hats. Coinbase originally awarded $250,000, a paltry sum for a Silicon Valley rhino. Twitter was quick to dismiss a quarter of a million as a bear market prize, especially given the scale of the hack and the fact that Coinbase executives make that amount every year.
Coinbase Senior Management Salary Comparison. Source: similar
Alpha Tree told Cointelegraph that the amount was not too small to be offensive.
“While a higher reward might make sense to deter more gray hats from exploiting vulnerabilities, it is common for cryptocurrencies to lose touch with the value of money. For most workers, $250,000 is a very appropriate amount.”
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Ultimately, these events highlight the importance of white hat hacking in a relatively young industry. The US State Department recently announced that it will offer up to $10 million in crypto rewards to white-hat hackers; However, Tree of Alpha asserted that “white hat hacking is critical, but is still criminally ignored by companies.”
In a word to the wise they concluded:
“Companies will not hesitate to spend tens of millions on marketing, but they will not spend a fraction to make sure there is more in the market.”