Coinbase Wallet quietly integrates the Blockaid security tool

Coinbase Wallet, a self-sustaining wallet managed by the owner of cryptocurrency exchange Coinbase, will integrate the Blockaid security tool by the end of 2023.

Coinbase Wallet and Blockaid announced the news in a joint report to Cointelegraph on March 13, saying that the new technology was integrated five months ago to provide an additional layer of security to Coinbase users.

With integrated Blockaid technology, Coinbase has saved more than $75 million from being stolen, the companies said. According to the announcement, the security tool scanned and analyzed 114 million transactions and DApp connections, stopping nearly 800,000 wallet connections from malicious decentralized applications (DApps).

Blockade CEO Edo Ben Nathan told Cointelegraph that the platform was able to calculate the number of funds deposited by aggregating malicious transactions submitted to users at the wallet level and calculating the value of the proposed transaction in real time. “We can say with certainty that the minimum amount of money saved for consumers is more than 75 million dollars,” he said.

$75 million is the “low band” for the fraud Blockaid has detected for Coinbase Wallet users, Blockaid CTO Raz Niv told Cointelegraph.

“It takes all the transaction warning screens we've provided to Coinbase Wallet users and calculates the amount blocked on these transactions,” he added.

Coinbase Wallet's integration with Blockaid specifically enables better transaction simulation – a security feature used to predict the outcome of a transaction before it is transferred to the blockchain. By allowing the platform to anticipate the potential consequences of certain crypto transactions, transaction simulation enables opportunities to better prevent crypto fraud and theft.

According to the announcement, Coinbase uses three Blockaid Application Programming Interfaces (APIs) to help keep users secure when browsing DApps, using Web3 protocols or addresses, and during on-chain messaging.

With Blockaid technology, Coinbase Wallet users better understand what happens when they sign a transaction, including transferring on-chain assets like Ether (ETH) and off-chain transactions like Seaport orders through OpenSea.

According to Coinbase's Senior Director of Engineering, Chintan Turakia, the integration has improved trading tokens on at least seven chains, including the Ethereum network and six other Ethereum Virtual Machine (EVM) chains. He pointed out that Base, Optimum and Polygon support EVM-compatible networks.

Despite the promising capabilities of transaction tokens, such technology alone is insufficient to adequately protect users, the joint report emphasized.

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When combined with authentication – the process of determining whether a given transaction is malicious – a user gains additional transaction security. Coinbase Wallet users will see a warning on their confirmation screen when a transaction is detected as malicious.

Coinbase Wallet isn't the only one to implement Blockaid's transaction security technology. Major EVM wallet MetaMask introduced security alerts by Blockaid in November 2023. In February 2024, MetaMask announced the addition of default security alerts for several blockchains, including Linea, BNB Smart Chain, Polygon, Arbitrum, Optimism, and Avalanche.

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