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Coinbase Wallet provokes controversy by integrating a novel, encrypted messaging function

Coinbase Wallet, a non-custodial cryptocurrency wallet, is poised to unveil a novel feature. However, some crypto security experts express concerns that this development could potentially serve as a fresh avenue for scammers to exploit unsuspecting users.

Coinbase Wallet, a digital asset wallet without custody, is set to debut a novel feature. Some...
Coinbase Wallet, a digital asset wallet without custody, is set to debut a novel feature. Some cryptocurrency security specialists express concerns that this innovation might serve as a new instrument for scammers to perpetrate frauds against users.

Coinbase Wallet provokes controversy by integrating a novel, encrypted messaging function

Coinbase Wallet, the digital wallet from crypto exchange titan Coinbase, is stepping into the arena of super apps with a brand new feature - but some cybersecurity experts are raising red flags, warning it could be a boon for scammers instead.

Coinbase Wallet made the announcement on Tuesday, mentioning the implementation of a snazzy new encrypted messaging system, powered by the XMTP protocol. This feature will allow users to exchange encrypted direct messages and group chats, along with seamlessly incorporating mini-apps within the chat interface itself. In other words, you might soon be able to chat, trade, and play games all in one place!

But, despite excitement from some users, cybersecurity experts aren't feeling quite as enthusiastic. Taylor Monahan, the head of security at Ethereum wallet MetaMask, took Coinbase to task on X (previously Twitter), claiming that the company has been blind to, or powerless against, scammers who've been infiltrating user accounts on Coinbase for over a year. Monahan went on to criticize Coinbase's decision to build a feature that gives these scammers a direct, encrypted channel to all wallet users, potentially making it easier for them to prey on innocents.

Monahan's sentiments echo those of ZachXBT, an anonymous blockchain investigator known for his keen eye when it comes to crypto security issues. In separate posts on X, ZachXBT pointed out that "no other major exchange has the same problem," adding that they "cannot recommend Coinbase as an exchange to anyone."

Alas, as of now, Coinbase hasn't seen fit to reply publicly to these concerns.

The pursuit of a super app status may be signaling a move towards a world where we can handle all our crypto needs with just a single app. But the security community is asking Coinbase to tread carefully to avoid making it a playground for scammers and phishers instead. In an age where online security is paramount, will Coinbase heed the warnings? Only time will tell.

  1. Coinbase Wallet, a digital wallet from the cryptocurrency exchange giant, wants to become a super app with a new encrypted messaging system powered by XMTP.
  2. The new feature will enable users to chat, trade, and play games all within the same interface.
  3. However, cybersecurity experts like Taylor Monahan, head of security at MetaMask, have raised concerns about the potential increase in scamming activities.
  4. Monahan accused Coinbase of being either oblivious to or powerless against scammers infiltrating user accounts for over a year.
  5. She also criticized Coinbase for building a feature that scammers could use to encryptedly communicate with all wallet users.
  6. ZachXBT, a blockchain investigator known for his insight into crypto security issues, shared similar concerns, stating no other major exchange faces such problems.
  7. As of now, Coinbase hasn't addressed these concerns publicly, and it remains to be seen if they will heed the warnings amidst the pursuit of super app status, where a single app could handle all crypto finance and technology needs.

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