WASHINGTON (dpa-AFX) - Coinbase disclosed a major data breach, revealing that cybercriminals bribed overseas customer service agents to access sensitive user information, enabling targeted social engineering attacks. The cryptocurrency exchange estimates the incident could cost up to $400 million to address.
The breach came to light on May 11 after Coinbase received an anonymous email claiming possession of internal documents and customer data. The attacker demanded $20 million in exchange for not releasing the information.
Coinbase has refused to pay the ransom and is cooperating with law enforcement, offering a $20 million reward for information leading to the perpetrators' arrest.
Although no passwords, private keys, or funds were compromised, the attackers gained access to highly sensitive information, including names, addresses, phone numbers, email addresses, masked bank account details, government ID images, and account balances.
The breach affected fewer than 1 percent of Coinbase's monthly transacting users, and the company has pledged to fully reimburse any customers who were defrauded.
Coinbase said it independently detected the breach earlier this year and promptly terminated the employees involved. It has since alerted impacted users and strengthened its fraud prevention systems.
The attackers, according to the company, recruited rogue agents primarily through business process outsourcing operations in India.
The timing is notable; the breach was disclosed just days after Coinbase was added to the S&P 500 index and announced a strategic acquisition to boost global expansion.
Coinbase's role as a custodian for billions in crypto assets and its prominent position in U.S. crypto policy make the breach particularly significant, underscoring the escalating risks of insider threats and the growing sophistication of attacks targeting the digital asset industry.
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