Security PSA: Protecting ERC-20 assets from malicious actors

Tl;dr: At Coinbase, our top priority is, and always will be, protecting you and your digital assets. That’s why we secure Coinbase with the latest industry-leading technology and work with the larger community to build a safer crypto ecosystem so that everyone is able to succeed.

In this blog post, we share how a contract with dangerous superuser roles is only as secure as the protections on those roles and discuss controls including multisig, a governance contract, or revoked privileges that asset issuers can implement to prevent a single actor from exercising privileges in a malicious way.

By The Coinbase Digital Asset & Protocol Security Team

At Coinbase, when considering assets for listing we define a risky function as any function that can impact user balance transfer or amounts — directly or indirectly. This can be as direct as a superuser being able to burn funds on anyone’s behalf, or as indirect as the ability to upgrade the token, which could change the token and/or user balances. Since Coinbase custodies assets on behalf of users, Coinbase Security needs to be able to provide users with the peace of mind that their tokens are safe. Therefore, any risky functionality within an asset reduces its eligibility for being listed on Coinbase.