Coinbase Faces $20M Ransom After Insider Data Breach

By / / Crypto News, Daily News
Coinbase refuses $20M ransom after data breach; offers $20M reward. Less than 1% of users affected. Estimated costs up to $400M.

Coinbase, the largest cryptocurrency exchange in the U.S., has confirmed a serious security incident where hackers gained access to sensitive personal data of approximately 97,000 customers. This represents less than 1% of Coinbase’s user base. The breach was traced back to a bribery scheme involving overseas customer support contractors, allowing cybercriminals to obtain names, addresses, emails, partial Social Security numbers, and government ID images.

Table Of Contents
  1. Hackers Demand $20M Ransom, Coinbase Refuses
  2. $20 Million Reward Offered for Information
  3. Coinbase Estimated Financial Impact Reaches $400M
  4. Coinbase Security Upgrades and Employee Terminations
  5. A Major Setback Before S&P 500 Inclusion

Hackers Demand $20M Ransom, Coinbase Refuses

After stealing the data, the hackers attempted to extort the company by demanding $20 million in Bitcoin to prevent the release of the stolen information. However, Coinbase firmly rejected the demand. CEO Brian Armstrong stated that the company refuses to support criminal activity and instead chose to investigate the breach thoroughly.

$20 Million Reward Offered for Information

Rather than giving in to ransom demands, Coinbase announced a $20 million reward fund for anyone who can provide information that leads to the identification and arrest of those behind the attack. This bold stance reflects the company’s commitment to accountability and cybersecurity.

Coinbase Estimated Financial Impact Reaches $400M

Initial estimates suggest the breach could cost Coinbase between $180 million and $400 million. This figure includes costs for technical remediation, customer notifications, reimbursements, legalz actions, and security enhancements. Following the public disclosure of the breach, Coinbase’s stock price dropped by 7%, reflecting investor concern.

Coinbase Security Upgrades and Employee Terminations

In response to the breach, Coinbase is implementing several major changes to its support operations and overall security protocols. The company has terminated the employees involved in the bribery scheme and is working with law enforcement to pursue criminal charges. Additionally, Coinbase is building a new U.S.-based supportz center to ensure greater oversight and protection of user data going forward.

A Major Setback Before S&P 500 Inclusion

The timing of this incident9 is especially critical, as Coinbase is on track to be included in the S&P 500 index—a significant milestone for both the company and the broader cryptocurrency sector. Despite the setback, Coinbase’s firm response is being viewed as a decisive move to reinforce trust and protect its long-term reputation.

Also Read: Coinbase Eyes More Acquisitions After $2.9B Deribit Deal

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