Coinbase Faces Cyberattack As Hackers Demand $20 Million Ransom

Coinbase, a major cryptocurrency exchange, experienced a security incident involving unauthorised access to customer data by some of its overseas support staff. According to the company, only a small number of people were affected, and their personal information was revealed.

The company stated that it received an email from an unidentified threat actor on May 11, claiming possession of customer information and internal documents.

According to a regulatory filing cited by Reuters, Coinbase estimates the financial impact of this breach could range between $180 million and $400 million. The filing came after the company received a ransom demand of $20 million, which it refused to pay.

In its tweet, Coinbase stated that it will not pay the $20 million ransom demanded by the hackers. Rather, the company has committed to seeking among the most severe consequences and established a $20 million reward fund to assist in identifying and apprehending those at fault.

On its official blog, Coinbase shared that cybercriminals bribed and recruited some overseas customer support agents to gain access to the personal data of less than 1 per cent of its monthly active users. The company emphasised that no passwords, private keys, or customer funds were compromised in the breach. Additionally, Coinbase confirmed that Coinbase Prime accounts remained unaffected by the incident.

Coinbase stated that the stolen data included names, contact information, masked Social Security numbers, and some government ID images. Coinbase confirmed it has terminated the employees involved and will reimburse any customers who were tricked into sending funds to the attackers.

According to sources cited by Reuters, the U.S. Securities and Exchange Commission (SEC) is reviewing whether Coinbase misstated its user figures and whether this raises concerns about the company’s compliance with know-your-customer (KYC) regulations. However, a Coinbase spokesperson has denied any such investigation related to KYC or Bank Secrecy Act compliance.

Crypto security remains a major concern, with hackers stealing $2.2 billion from crypto platforms in 2024, according to Chainalysis. This marks the fourth consecutive year that such thefts have exceeded $1 billion, underscoring persistent vulnerabilities in the cryptocurrency space.

Furthermore, the 2024 Digital Threat Report by CERT-In, CSIRT-FIN, and cybersecurity firm SISA highlights cryptocurrencies as a major projected danger for 2025, showing a substantial shift in the cybercrime environment.