Coinbase’s $300,000 wallet was hacked because a misconfigured token approval was taken advantage of by an MEV bot. At the same time, the company has restarted its Stablecoin Bootstrap Fund to assist with USDC liquidity for top DeFi protocols.
Coinbase Wallet Hack Courtesy Of Mev Bot
Coinbase token approval setting had a weakness that exposed its firm decentralized exchange (DEX) wallet to bot attack by MEV. The wallet had already approved an existing 0x Project swapper contract for token transfers without suitable security verification. The pre-approved contract was used by hackers to steal approximately $300,000 without even accessing the private key.
The issue stemmed from approving the wrong contract, a decision likely made during an internal operational process. Coinbase confirmed the breach involved only corporate funds. No customer wallets or accounts were impacted. The affected wallet has since been secured, and all token approvals were revoked.
Stablecoin Bootstrap Fund Returns
Coinbase also restored its Stablecoin Bootstrap Fund to increase USDC liquidity. It will sponsor lending and liquidity protocols including Aave, Morpho, Kamino, and Jupiter. This revival aims to strengthen decentralized finance infrastructure amid fluctuating market volumes.
The program was first launched to provide liquidity assistance to DeFi protocols through USDC. Its backflow reflects Coinbase’s ongoing efforts at stabilizing and making tokens tradable on decentralized markets. Increased liquidity can potentially make capital more efficient and lower the friction of trading on such markets.
Double Pursuit To Revive Trust And Liquidity
Both of these measures reflect the emphasis on internal risk management and the health of external markets that Coinbase maintains. The wallet hack did reveal weaknesses in smart contract permissions. Although recovering funds reaffirms its support for backing USDC in DeFi.
Coinbase’s move is a strategic one: isolating operating risk but actively positioning to contribute to protocol liquidity. As DeFi continues to evolve, even for the larger players, security will be a concern. But to invest in liquidity solutions simultaneously is demonstrating resilience and flexibility in a high-risk environment.
