Coinbase Data Breach Sparks DOJ Probe and Raises Safety Alarms for Crypto Holders
A recent data breach at Coinbase, the world’s largest crypto exchange, has exposed sensitive customer information and triggered a probe by the U.S. Department of Justice.
According to Coinbase, cybercriminals bribed rogue overseas support agents to help carry out the attack. On May 11, the company received an email from an unknown actor claiming access to internal documents and customer data, demanding $20 million in Bitcoin. Coinbase refused the ransom and instead offered a $20 million reward for information leading to the arrest and conviction of the hackers.
“We have notified and are working with the DOJ and other U.S. and international law enforcement agencies and welcome law enforcement’s pursuit of criminal charges against these bad actors,” Coinbase Chief Legal Officer Paul Grewal told Reuters.
While login credentials and passwords were not compromised, the attackers accessed personal details including names, home addresses, account balances, phone numbers, emails, and government-issued ID images. Coinbase has pledged to implement extra security measures and reimburse users who were tricked into transferring funds.
In response to growing safety concerns, Coinbase is also launching a new U.S.-based support center to enhance customer protection.
The breach has drawn sharp criticism from TechCrunch founder and venture capitalist Michael Arrington, who warned of real-world consequences, amid a wave of kidnap attempts targeting high-net-worth crypto holders. “This hack—which includes home addresses and account balances—will lead to people dying. It probably has already,” he tweeted. “The human cost, denominated in misery, is much larger than the $400 million or so they think it will actually cost the company to reimburse people.”
Arrington also called for stronger regulation and criminal accountability for executives who fail to safeguard user data: “This should be a wake-up call for regulators. If an executive’s negligence leads to people being harmed, prison should be on the table.”
“We understand that some customers and industry participants are feeling concerned following news of the incident. We take these concerns seriously and are in active coordination with law enforcement to track the criminals responsible,” a Coinbase spokesperson told Decrypt. “If you believe you are being personally targeted or threatened, please contact local law enforcement immediately.”
Although Coinbase reported the incident to authorities, it clarified that the company itself is not under investigation, according to Bloomberg.
