A possible bug has been reported on Coinbase.
It is a small problem, but for users, it can have big consequences, hence it cannot be ignored.
What we are about to tell you is in fact a true story that happened to one of our readers who wanted to share it with us to inform other users of the platform of the existence of this problem.
It all stems from an attempt to deposit USDC with QR code.
USDC are ERC-20 tokens on the Ethereum blockchain, which can be sent to a public Ethereum address.
These public addresses can receive not only ETH but also any other ERC-20 tokens.
However, for internal reasons, many exchanges do not allow any ERC-20 token to be received on the ETH address of the user’s wallet on their platform, but require users to use a different Ethereum address for each ERC-20 token they wish to deposit on the wallet of the exchange.
Since many exchanges work this way, despite the fact that it often creates problems, there would be nothing wrong with it. That is, this would not be a bug, but just a choice of the exchange which can cause some issues.
In fact, when sending an ERC-20 token to the ETH address of your wallet on an exchange, the transaction is successful and cannot be cancelled, but the exchange may not recognize it, precisely because many exchanges require that a different address be used for each token.
So for example, you should not send USDC to your Coinbase ETH address, but use the USDC address, which is different.
However, if you choose to scan the QR code of your USDC address there is a problem.
Here is what happened to our reader.
She/he wanted to deposit USDC on her/his Coinbase wallet. She/he clicked on ‘receive’, and selected USDC. Coinbase showed the following screen:
As you can see from the screenshot, the public address to which our reader should have sent USDC is 0xA6b95804D0D414F5andF4539907556321566DAbA98.
This is an Ethereum address to which you can theoretically also send ETH or other ERC-20 tokens, but if you send tokens that are not USDC to this address, Coinbase will not recognize them, and they would be lost forever.
The problem is, when scanning the QR code, what the scanner reads is:
That is, the text string encoded in the QR code not only contains the public address to which the USDC should be sent, but also another one.
Unfortunately, when scanning with some wallets, they don’t take as their sending address the correct one, i.e. the second one, but the first one, 0xa0b86991c6218b36c1d19d4a2and9eb0ce3606eb48.
As is easy to understand by comparing them, the two addresses are different, so if the wallet sends the USDC to the first public address in the QR code it will not send them to Coinbase’s USDC wallet, but to another address.
Unfortunately, the USDC tokens sent this way have been lost.
That is, they were actually sent to the first public address encoded in the QR code, but Coinbase did not accept them because that was not the USDC wallet address.
Moreover, the exchange’s support has not been able to intervene because, due to the large number of requests received lately, it has not yet taken action to deal with the complaint.
In these cases, the solution, to avoid running into this problem, is simply not to use the QR code scan, but to copy the public address by clicking on the appropriate icon.
Should the exchange wish to respond, or know which user has had this problem, please contact the Cryptonomist editorial staff at [email protected].