Coinbase Regularly Hires Contractors to Try and Breach Its Security

We’re not even halfway through 2019 and multiple crypto exchanges have already suffered security breaches. Coinbase has so far been the exception.

Speaking to Wall Street Journal reporter Paul Vigna at Consensus 2019, Coinbase CEO Brian Armstrong revealed the secret to the exchange’s ongoing success: it regularly hires outside contractors to try and break through its security protocols.

We hire third-party firms to try and break into it,” he explained. “They pose as candidates applying to work at Coinbase.

Typically, only the head of security and me know that it’s a drill,” he continued. But the person will come in, and apply for a job, and try and get into the office, and try to break into our systems.

These hired “spies” have so far managed to breach one or two layers of Coinbase security according to Armstrong, but since every successful breach by the spy team lets Coinbase further improve their security protocols, it seems no one has punched through all of the exchange’s security layers yet.

Armstrong also assured Coinbase users by saying that customer funds are stored in a geographically distributed database. Coinbase is also in the process of developing the fourth generation of its cold storage system, which is reportedly rebooted every 18 months.