Coinbase Wallet Fixes SegWit Implementation Bug, Refunds Affected Users

Coinbase Wallet Fixes SegWit Implementation Bug, Refunds Affected Users
Coinbase has fixed a payment gateway bug that emerged after SegWit implementation and caused users to lose their funds.

The Coinbase wallet and exchange service has fixed a bug in the payment gateway system which caused users to lose their funds from Bitcoin transactions via the platform. The issue emerged two weeks after the cryptocurrency exchange announced the launch of Segregated Witness (SegWit) support for its transactions.

In their Reddit post on March 12, Coinbase user Dazzling_Substance shared a problem with the platforms payment gateway when it failed to send Bitcoin to a merchant. The user suggested that the bug was caused by a problem in the Bitcoin Payment Protocol (BIP70) that provides communication between merchants and customers.

Dazzling_Substance suggested that Coinbase might have missed the update of the BIP70 protocol, subsequently causing the loss of coins he attempted to send:

If you send payment to a merchant using a payment gateway, they will not receive the bitcoin and you will lose your coins due to a issue with their system (they have not updated the BIP70 to use segwit addresses and your coins are sent to a non-segwit address and are subsequently lost in their tracking system).

The Coinbase team promptly commented on the issue to Cointelegraph, stating that the BIP70 payment protocol update has been implemented, but the problem emerged because the payment address requested was not SegWit-compatible. A Coinbase spokesperson stated that the issue has affected less than 30 customers and has been immediately fixed.

As soon as we were notified about the issue we started working to resolve and the issue was fixed within hours. Less than 30 customers were affected by the issue and we've issued refunds to all customers.

The BIP70 protocol was introduced by Bitcoin developers Gavin Andresen and Mike Hearn in July 2013 in order to improve Bitcoin payment services and provide safer transactions, preventing man-in-the-middle attacks.

On Dec. 14, US payment processor BitPay announced that it will require Bitcoin Payment Protocol-compatible wallets in order to resolve users payment problems such as underpayments and overpayments. On Jan. 10, BitPay acknowledged that some of the users have been inconvenienced by the requirement when they had to switch to BIP70-compatible wallets listed on BitPays support page.

13.03.2018 / 14:30 112
Coinbase Releases Tax Calculator But Many Users Will Likely Not Qualify Coinbase Releases Tax Calculator But
Coinbase customers can calculate their cryptocurrency tax obligations this year, provided they meet multiple requirements. US exchange and wallet
Coinbase Launches Index Fund: A Gateway for More Investors Coinbase Launches Index Fund: A Gateway
Mainstream cryptocurrency adoption is one of the biggest problems which this sector faces today. Coinbases newly announced cryptocurrency index
The Arrival of SegWit: Bitcoins Saving Grace? The Arrival of SegWit: Bitcoins Saving
SegWit (segregated witness) Bitcoin transactions are at an all-time high, and Bitcoin transaction fees are the lowest they have been in months. What
Crypto Exchange Coinbase Launches Four-Coin Index Fund, Only For Accredited Investors Crypto Exchange Coinbase Launches
Crypto exchange and wallet Coinbase is starting its own four-coin index fund, open to all U.S. residents that are also accredited investors. Crypto
Coinbase User Files Class Action Against Company, Claims Insider BCH Trading Coinbase User Files Class Action
A US Coinbase user has filed a class action lawsuit against Coinbase, accusing the platform of insider non-public data disclosure regarding Bitcoin
Bitcoin Core Releases Software Upgrade With Full SegWit Support Bitcoin Core Releases Software Upgrade
The Bitcoin Core development team has released a much-anticipated software upgradedesigned to help scale the cryptocurrency network. Version 0.16.0
Comments (0)
Add a comment
Comment on