Sending cryptocurrency funds to an incorrect address always has disastrous consequences. One holder of USDC found that out the hard way. It seems Coinbase doesn’t have the correct “checks” in place to ensure users can’t send funds to the USDC contract address.
Another Coinbase Kerfuffle
It is not the first time Coinbase gets negative press. Nor will it be the last time either. Being a major cryptocurrency company will attract a lot of attention either way. In this particular case, however, there is plenty of reason for critical thinking. After all, one would expect companies of this scale to effectively protect their users a bit better.
One Coinbase user succeeded in sending $3,253 USDC from the platform to the USDC smart contract itself. Not only was he able to copy the contract address into the “to” field, but Coinbase didn’t prevent the transfer either. Why that is the case, remains unclear. There have been ample incidents regarding sending funds to Ethereum contract addresses in the past.
Once the transaction was approved, things went from bad to worse. The funds cannot be recovered under any circumstance. One option is for Coinbase to refund the user due to their illicit security practices. Whether that will effectively happen or not, is very difficult to predict at this time.
Following a conversation with Coinbase’s support, there may be a resolution in the next few business days. However, chances of having something positive come of this remain very low. After all, it is up to the individual user to ensure they send funds to the correct address. That said, companies such as Coinbase can introduce some sort of security measure either way.
Where’s the Promised USDC Solution?
Looking back in term, there is a post by Peter Jihoon Kim of Coinbase and USDC. He claims how a solution would be introduced to “rescue” locked up funds. It has not been implemented over legal and operational concerns. In hindsight, this fix should have been implemented some time ago.
Unfortunately, there are several incidents involving USDC being sent tot he wrong addresses. Several users complain about not being able to recover funds. A solution is needed now more than ever. Considering how USDC is built by the Coinbase team – in part – implementing such a fix can’t be overly complicated. Users can claim ownership of USDC unless they use the Coinbase retail interface, though.
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