Coinbase CISO Reveals Top Threats to Crypto Users and How to

In
an
interview
with
crypto.news,
Jeff
Lunglhofer
–
Coinbase’s
chief
information
security
officer
–
identified
social
engineering
scams
as
the
most
significant
threat
to
both
novice
and
experienced
crypto
users.
“Social
engineering
scams
are
by
far
the
number
one
threat
to
crypto
enthusiasts
and
crypto
holders
and
investors
today,”
warned
Lunglhofer.

Lunglhofer
pointed
out
that
these
scams
are
not
exclusive
to
the
crypto
sector.
However,
their
prevalence
has
seen
a
noticeable
uptick
over
the
past
few
years.
To
mitigate
the
risks
associated
with
these
scams,
Lunglhofer
suggested
two
primary
precautionary
measures.

The
first
recommendation
is
to
disregard
any
unsolicited
calls
claiming
to
represent
reputable
exchanges,
such
as
Coinbase
or
Kraken.
Rather
than
interacting
with
these
dubious
calls,
Lunglhofer
advises
users
to
hang
up
and
contact
the
company
directly
through
their
official
website
or
channels.
According
to
him,
this
simple
precaution
could
prevent
up
to
80%
of
social
engineering
scams.

Secondly,
understanding
the
difference
between
self-custody
and
exchange
custody
is
crucial.
Self-custody,
like
Coinbase
Wallet,
gives
the
user
control
over
their
assets.
It
also
places
the
responsibility
of
protecting
seed
phrases,
which
should
never
be
shared,
on
the
user.
As
Lunglhofer
pointed
out,
“you
control
[your
wallet]
–
we
have
no
control
over
that.”

In
contrast,
exchange
custody
involves
a
third-party
service
managing
your
private
keys,
thus
securing
and
managing
your
crypto
assets.

Lunglhofer
also
advised
against
sending
crypto
to
unknown
entities,
highlighting
the
rise
in
romance
scams
where
emotional
connections
are
manipulated
to
defraud
victims.
“I
feel
like,
particularly
post-COVID,
people
were
just
lonely
and
were
vulnerable
to
[romance
scams],
and
it’s
heartbreaking
to
see
people
go
through
that.
They
just
want
to
be
loved,”
he
lamented.

Lunglhofer
also
discussed
the
burgeoning
threat
of
deepfake
technology,
which
scammers
leverage
to
impersonate
leaders
and
deceive
individuals
into
sending
assets
to
fraudulent
wallets.
He
emphasizes
the
importance
of
verifying
video
interactions
in
light
of
increasingly
convincing
AI-driven
scams.

Apart
from
individual
scam
prevention
strategies,
Lunglhofer
underscored
the
importance
of
cooperation
between
cryptocurrency
platforms.
Initiatives
such
as
the
Crypto
Information
Sharing
and
Analysis
Center,
where
industry
players
share
information
on
trends,
scams,
and
security
vulnerabilities,
are
crucial
in
bolstering
the
security
of
the
entire
crypto
ecosystem.
As
a
board
member
of
Crypto
ISAC,
Lunglhofer
believes
that
“what
a
great
opportunity
for
crypto
companies
to
come
together
to
share
information…
share
information
about
scams,
trends
that
we’re
seeing
or
vulnerabilities
that
might
affect
the
broader
crypto
ecosystem.”

Finally,
he
addressed
concerns
about
the
reputation
of
crypto,
particularly
its
association
with
illicit
activities.
While
acknowledging
that
cryptocurrencies
like
Bitcoin
(BTC)
have
been
linked
to
criminal
activity,
Lunglhofer
argues
that
the
narrative
is
often
exaggerated.
“If
you
want
to
commit
a
crime
and
remain
anonymous,
the
last
place
you’d
do
it
is
on
a
blockchain.
The
great
thing
about
blockchain
is
every
transaction
lives
forever.
It’s
available
for
analysis
and
perpetual
review
and
transparency,”
he
concluded.