Coinbase causes panic among users after mistakenly sending them two-factor authentication reset notifications

Users of leading United States cryptocurrency exchange Coinbase were in a panic over the weekend after the exchange mistakenly sent an email to its users stating that their two-factor authentication (2FA) settings had been changed.

Coinbase accidentally sent the email to its 125,000 users on August 27, sparking widespread public outrage.

On August 29, Coinbase apologized for the blunder on Twitter, saying: “We are focused on building trust and security in the crypto community so that the open financial system we all hope for becomes a reality. We recognize that issues like this can undermine that trust.”

I received the response and was terrified that someone had accessed my account or made a withdrawal. After verifying nothing had happened, I immediately logged in and reset my password.

— AJ‍⚾️l‍ (@AgedMcNugget) August 29, 2021

Despite Coinbase’s apology, many users said they took drastic steps in response to the email, including overhauling their security settings and liquidating their cryptocurrency holdings, out of concern that their accounts had been targeted by hackers.

Comments on the exchange’s social media also showed that many users were unable to access the Coinbase app in the days following the incident.

Same here. The app still says "We're having connection issues" while other Coinbase users I know who didn't get the text message yesterday are still able to log in.

— Dr. Andrevius Barnaby II (@AndreviusB) August 28, 2021

Coinbase added: “We will continue to work hard to regain the trust of every customer affected by these notices.”

The company also announced that it would compensate users with $100 worth of Bitcoin.

On August 30, Coinbase issued an apology statement on the r/Coinbase section of Reddit, which received mixed reactions from users.

Reddit user “CoCraic_PNW” claims that despite receiving 2FA messages on both Coinbase and Coinbase pro, they have not received the promised $100 compensation, and in light of the incident, they said they will be moving their business to another exchange.

Reddit user "Film2021" also stated that they have not received $100 worth of BTC and are currently looking to transfer funds from Coinbase to one of its competing exchanges.

However, not everyone was critical of Coinbase, with Reddit user #Leagance praising the company for promptly providing compensation for its blunder:

“Just got my $100. Thanks Coinbase. Whatever the case may be, I’m glad to know how quickly and easily I can lock down my account if 2FA ever changes in some way.”

The incident comes just days after reports emerged that thousands of disgruntled customers claimed their Coinbase accounts had been hacked and emptied.

According to a CNBC report published on August 24, thousands of users claim that Coinbase support has failed to respond to requests for help regarding the incident.

“Interviews with Coinbase users across the country and a review of thousands of complaints revealed a pattern of account takeovers in which users saw funds suddenly disappear from their accounts, followed by Coinbase’s poor customer service that left those users feeling unresolved and angry,” CNBC wrote.

Earlier this month, Coinbase announced a new support hotline for customers who believe their accounts have been hacked.