Coinbase Users Reassured After $400M Breach on Exchange

• Coinbase was targeted with 1% of its MAU’s data breached by hackers.
• Despite the implications of the breach, the exchange is not considering paying a ransom.

Brian Armstrong, the CEO and co-founder of the US-based Coinbase exchange, has promised to reimburse users affected by a recent $400 million data breach. The CEO said the exchange would cover all losses, emphasizing its commitment to user protection.

Details of the Coinbase Attack

Armstrong took to the social media platform X to share details of the latest Coinbase breach. In a short video clip, he revealed the exchange’s remediation efforts and plans to prevent a similar occurrence. 

Armstrong confirmed that a group of cyber criminals stole the personal data of Coinbase retail customers. The breach affected less than 1% of Coinbase’s monthly transacting users. The CEO explained that the criminals bribed a group of overseas customer support agents, who facilitated the theft of user information. 

The criminals were able to secure customers’ names, addresses, government ID images, account balances, and corporate data. They aim to use this information for social engineering, impersonating Coinbase customer support, and tricking users into sending their funds.

Coinbase said no passwords, private keys, or funds were exposed, and Prime accounts are untouched. The exchange added that Two-factor authentication codes and private keys were not breached.

Following the data breach, the cybercriminals sent an email to Coinbase demanding a ransom of $20 million in Bitcoin in exchange for not releasing customers’ information. Rather than fulfilling their demand, Brian Armstrong has placed a $20 million bug bounty for anyone who provides information leading to an arrest.

He also promised to reimburse affected customers tricked into sending funds to the attackers. Armstrong said the exchange has fired staff involved in the breach and referred them to US and international law enforcement. Coinbase also plans to press criminal charges.

The latest attack on Coinbase comes a few months after blockchain investigator ZachXBT claimed that Coinbase users had lost $65 million to social engineering scams. As summarized in our earlier news story, ZachXBT urged Coinbase to improve security and restrict new account withdrawals.

Coinbase Stick to Its Crypto Ambitions

The latest attacks on Coinbase have not stopped the exchange from expanding in the crypto and blockchain space. As mentioned in our previous news brief, Coinbase revealed plans to release wrapped versions of four major cryptocurrencies. This move will bring LTC, ADA, DOGE, and XRP into DeFi on Coinbase’s Base.

Additionally, Coinbase recently clinched a new milestone, becoming the first crypto business to receive recognition in the S&P 500 Index. In our last update, we examined that Coinbase will stay listed with the ticker ‘COIN’, expanding the firm’s public listing.

Furthermore, Coinbase has announced plans to acquire Deribit, a Dubai-based crypto derivatives trading platform, for $2.9 billion. The deal, which consists of $700 million in cash and the rest in Coinbase shares, will expand the exchange’s role in derivatives.