Coinbase: Experts warn of security risks from AI coding

  • Security experts are sounding the alarm: A vulnerability discovered by HiddenLayer in the AI tool Cursor, which is allegedly used at Coinbase, allows attackers to infect entire codebases with malware via hidden Markdown commands.
  • Coinbase CEO Brian Armstrong is relentlessly pushing ahead with the adoption of AI. According to him, 40 percent of Coinbase's code is already written using artificial intelligence, and this share is expected to rise to 50 percent next month.

~40% of daily code written at Coinbase is AI-generated. I want to get it to >50% by October.

Obviously it needs to be reviewed and understood, and not all areas of the business can use AI-generated code. But we should be using it responsibly as much as we possibly can. pic.twitter.com/Nmnsdxgosp

— Brian Armstrong (@brian_armstrong) September 3, 2025

  • Why experts warn: Using the “CopyPasta License Attack” exploit, attackers could inject backdoors, exfiltrate data, and manipulate critical systems. Developers and researchers like computer science professor Jonathan Aldrich describe Armstrong's actions on X as “crazy” and a “huge red flag” for a security-critical company.

Software company leaders: don't do this. AI is a tool, but mandating its use at a certain level is insane. I have no interest in using Coinbase, but even if I did I certainly wouldn't trust it with my money after seeing this. https://t.co/hL0c4vd7uC

— Jonathan Aldrich (@JAldrichPL) September 4, 2025

    This is a giant red flag for any security sensitive business https://t.co/2x23cP0TqR

    — Larry Engineer 🍡 (@larry0x) September 4, 2025

    • As the largest US crypto exchange and a regulated custodian for institutional clients, Coinbase is a central hub for billions of dollars in customer funds. A security flaw in its codebase could undermine confidence in the entire platform. Coinbase not only holds assets for millions of private customers, but also for major players like BlackRock and the US government. An attack on the exchange's infrastructure would therefore pose a systemic risk to the entire crypto market.

    Recommended Video Why this NBA superstar says: Crypto = Freedom

    Source:

    • Report from Hidden Layer | Hidden layers
    • X-Post by Brian Armstrong | X
    • X-Post by Larry Engineer | X
    • X-Post by Jonathan Aldrich | X


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