Just days before its anticipated entry into the prestigious S&P 500 index, leading cryptocurrency exchange platform Coinbase has disclosed a significant cyber attack that could cost the company up to $400 million.
The firm says it was targeted by sophisticated hackers who illicitly obtained customer information by compromising Coinbase contractors and employees through undisclosed payment methods.
In a blog post, Coinbase stated that the cybercriminals managed to access “less than 1%” of its extensive customer data. This breach was then exploited to impersonate Coinbase, enabling the attackers to deceive users into transferring their cryptocurrency holdings.
Following the successful infiltration, the group demanded $20 million ransom from Coinbase to remain silent about the incident.
However, Coinbase has firmly refused to yield to the extortion attempt. Instead, the company says it has pledged to fully reimburse every customer who fell victim to the scam.
Furthermore, Coinbase announced the establishment of a $20 million reward fund, offering it for information that leads to the arrest and conviction of the individuals responsible for the attack.
The timing of this cyber incident is particularly sensitive, occurring mere days before Coinbase is slated to join the benchmark S&P 500 index – a move widely considered a landmark moment for the burgeoning cryptocurrency industry, signaling its increasing integration into mainstream finance.
Coinbase disclosed that it received an initial email from an “unknown threat actor” on May 11th, alerting them to the breach.
In its official statement, the company reiterated its commitment to its users, saying, “We will reimburse customers who were tricked into sending funds to the attacker.”
“We’re cooperating closely with law enforcement to pursue the harshest penalties possible and will not pay the $20 million ransom demand we received. Instead, we are establishing a $20 million reward fund for information leading to the arrest and conviction of the criminals responsible for this attack,” the firm said.
In a filing submitted to the U.S. Securities and Exchanges Commission (SEC), Coinbase provided an estimated financial impact of the attack, projecting costs to fall within the range of $180 million to $400 million.
The company clarified that this figure encompasses “remediation costs and voluntary customer reimbursements,” while acknowledging that this estimate remains subject to change due to “potential losses, indemnification claims, and potential recoveries.”
As a direct consequence of the security lapse, Coinbase confirmed that the staff members who were found to have shared customer information with the hackers have been terminated from their positions.
Looking ahead, Coinbase has proactively warned its customer base to anticipate further attempts from scammers and urged them to maintain a high level of vigilance.
The company explicitly stated, “Coinbase will never ask for your password, 2FA codes, or for you to transfer assets to a specific or new address, account, vault or wallet.”
Additionally, customers were advised to immediately lock their accounts if they encounter any suspicious activity.
In a direct message to its affected users, Coinbase expressed regret, stating, “To the customers affected, we’re sorry for the worry and inconvenience this incident caused. We’ll keep owning issues when they arise.”
Cybercriminals are now increasingly targeting the expanding crypto sector.
A recent report from the research firm Chainanalysis indicated that $2.2 billion was stolen from crypto businesses in 2024 alone.
You must be logged in to post a comment.