Coinbase Pays Hacker $30,000 for Discovering a Critical Vulnerability

Popular US-based cryptocurrency exchange Coinbase has recently paid a hacker $30,000 for discovering a critical vulnerability on its platform that, according to a company representative, has already been fixed.

The flaw was revealed earlier this week on Coinbase’s vulnerability disclosure program on HackerOne, a website that sees various firms pay white hat hackers for help patching security vulnerabilities. Speaking to the Hard Fork, a Coinbase spokesperson reportedly revealed the vulnerability has been fixed.

While details about the vulnerability haven’t been disclosed, the high $30,000 bounty reveals it was a severe one that could’ve had severe consequences. The US-based cryptocurrency exchange has a four-tier reward system, that pays between $200 and $50,000 depending o the vulnerability’s severity.

Coinbase determines severity based on impact and exploitability. For a bug to be critical, it must allow hackers to “read or modify sensitive data in a system, execute arbitrary code on the system, or exfiltrate digital or fiat currency in some way.”

The cryptocurrency exchange paid the hacker shortly after it launched an option for Coinbase Wallet users to backup an encrypted copy of their private keys to the cloud (iCloud or Google Drive, depending on users’ operating systems).

Since the recently found – and allegedly fixed – bug was deemed critical, it likely allows hackers to “unilaterally” exploit it without finding “significant roadblocks or special conditions” outside their controls. While this was the only large bounty awarded, Coinbase handed out several smaller one this week.

Bug Bounties In Crypto

Bug bounties in the cryptocurrency space are nothing new. Last year, Coinbase notably awarded a hacker $10,000 for finding a bug that allowed users to reward themselves with unlimited Ethereum.

In fact, as CryptoGlobe covered, cryptocurrency-related bug bounties have been profitable for security researchers looking to help firms within the industry, as last year they netted them nearly $900,000.

Available data shows that this year Block.one, the company behind EOS, has already handed out over $80,000 in bug bounties to hackers who found vulnerabilities.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.