Cryptocurrency exchange Coinbase began migrating huge funds on Saturday, moving tokens to novel internal wallets as part of a planned, routine security procedure to limit the long-term exposure of funds being held at the same wallet addresses that are publicly known.
According to analysts, the migration is not due to any cybersecurity breaches or external threats announcement from the company. Coinbase said:
“Periodic portfolio migration is a well-accepted best practice that minimizes long-term exposure of funds. This is a planned migration and is not related to changes in industry or pricing conditions. It is not in response to a data breach or external threat.”
This means that huge balances of Bitcoin (BTC), Ether (ETH), and other tokens will be transferred on-chain from Coinbase wallets to other internal Coinbase wallets already flagged by blockchain explorers and intelligence platforms.
Coinbase warned users that during the migration, fraudsters may try to take advantage of the situation by impersonating Coinbase representatives and contacting customers, asking for login credentials or asking users to transfer funds, something the exchange never does
The warning reminds cryptocurrency users to remain vigilant against phishing attempts, hacks, scams and other cybersecurity attacks in an ever-changing threat landscape.
Related: Coinbase is “doubling down” on Solana with its latest DEX acquisition
Dormant balances can be a trap for hackers: why periodically moving funds is a best practice
Hackers target centralized servers, information systems and balmy cryptocurrency wallets connected to the Internet to extract information and value from users.
These centralized repositories containing huge amounts of information or tokens are attractive to cybercriminals, who often plan these attacks for months and view huge centralized systems as attack traps.
The advent of artificial intelligence and AI-based tools gives hackers an advantage in gathering heuristic clues from publicly known information and other metadata that could compromise sensitive information or lead to theft, cybersecurity experts tell Cointelegraph.
Quantum computers also pose a threat to current crypto technology that is not in the distant future but may have already materialized retroactively, Gianluca Di Bella, a researcher in shrewd contracts and zero-knowledge proofs (ZK), told Cointelegraph.
Threat actors could compile cryptographic public keys now, until a sufficiently powerful quantum computer is invented.
The quantum computer can then obtain the private key from the public address in a “collect now, decrypt later” attack, Di Bella told Cointelegraph.
Cryptographic protocols must transition to post-quantum security standards as quickly as possible to neutralize the threat of retroactive hacking, Di Bella said.
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