- Coinbase Wallet will allow encrypted messages and mini app use inside chats, introducing communication features beyond wallet functions.
- MetaMask’s security chief warns this feature could give scammers encrypted access to wallet users, increasing phishing and impersonation risks.
- Blockchain investigator ZachXBT highlights Coinbase’s ongoing security weaknesses and criticizes its failure to stop account takeovers for over a year.
Coinbase Wallet is preparing to introduce encrypted messaging powered by the XMTP protocol, allowing users to send direct and group messages. The update will include access to mini apps directly within chats, expanding the wallet’s functionality into communication and app integration.
According to Coinbase Wallet’s post on X, the feature is designed to enhance user interaction. The integration of mini apps inside chat windows follows a trend previously explored by platforms like Telegram. While Telegram has limited mini app development to its TON network, Coinbase is opening its platform more broadly.
Security Experts Raise Red Flags
Despite the enhanced communication tools, security professionals are raising concerns. Taylor Monahan, head of security at MetaMask, publicly criticized the move. She noted that Coinbase has failed to curb ongoing scams targeting users and claimed the new feature could give scammers a direct, encrypted pathway to users.
Monahan’s remarks are consistent with earlier warnings from blockchain investigator ZachXBT. He has frequently pointed out Coinbase’s lagging security standards, especially concerning social engineering attacks. He recently stated that Coinbase remains the only major exchange facing this scale of account compromise and advised against using it.
Scammers May Exploit Direct Access
By enabling encrypted communication within wallets, experts warn that malicious actors could exploit the feature to impersonate support or send phishing links. Since these messages are end-to-end encrypted, Coinbase would have limited visibility to detect or intervene in scams once they are initiated.
Coinbase’s announcement came as its stock experienced an 8 percent increase, following news that it had become the first crypto firm added to the S&P 500 index. The timing suggests a push to build investor confidence while expanding its product suite.
