Immediate intervention by a white hat hacker saved Coinbase’s sophisticated trading platform from disaster.
“Tree of Alpha,” a white hat hacker, contacted Coinbase Chief Executive Officer Brian Armstrong to warn him that third parties could theoretically transfer Coinbase order books at arbitrary rates, which could result in a hefty payout for criminals .
Coinbase announced in a statement shortly after the tweet that it had temporarily halted trading on its Advanced Trading platform due to technical difficulties.
After resolving the issue, Tree of Alpha commended the Coinbase team for their prompt response, while Armstrong publicly expressed gratitude to the hacker for his timely assistance.
I’m sending a Hacker1 report, but I’m afraid it can’t wait. I can no longer say that this is potentially damaging to the market.
— Tree of Alpha (@Tree_of_Alpha) February 11, 2022
White Hat Acumen prevents major disaster
Coinbase was quick to respond to the hackers’ warning, announcing that it had suspended trading on the site within two hours of receiving TOA’s public tweet.
Two hours later, the exchange restored full presale service, including the ability for users to backorder. TOA independently verified the fix by providing a screenshot of the exploit.
Armstrong thanked Tree for supporting the Coinbase team, noting that he “loves how the crypto community supports each other!”
The white hats to the rescue!
An ethical hacker, or white hat hacker, uses hacking skills to find vulnerabilities in hardware, software, and networks. Unlike black hat hackers – or the malicious ones – white hat hackers adhere to a set of “moral principles” when doing their thing.
Many white hat hackers started their careers as black hat hackers. The terms refer to classic western flicks in which heroes wore white hats and villains wore black hats.
While this type of collaboration doesn’t seem to be widespread, it does happen.
Total crypto market cap at $1.877 trillion in the daily chart | Source: TradingView.com
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White hat hackers have also historically helped defend other cryptocurrency firms against potential attacks, saving the site and its users significant losses.
Last year, a hacker stole $612 million in assets from Poly Network, but after weeks of negotiations, almost all of the funds were recovered. The hacker said he carried out the attack to teach the network a lesson.
While the classification of Poly Network hackers as “white hats” is controversial, some hackers have been shown to act with good intentions.
For example, in August 2021, Paradigm’s security researcher @samczun helped solve a $350 million SushiSwap DEX issue.
Last week, another hacker helped figure out what happened to Wormhole, a $320 million bridge attack that was probably the most significant yet.
Meanwhile, hackers will be rewarded for their contributions to maintaining a clean, transparent, and trustworthy crypto environment.
White hats are becoming increasingly popular. As a result, a growing number of cryptocurrency companies, including Binance, the Ethereum Foundation, EOS, and Kraken, are offering rewards for detecting security vulnerabilities.
Related Reading | Meet Hacken, the first decentralized marketplace for white hat hackers
Featured image from Kaspersky, chart from TradingView.com