Crypto Giant Coinbase Falls Prey to Insider Job, Expects $400 Million in Losses
In a devastating turn of events, crypto company Coinbase has reported that some contractors and employees based outside the U.S. stole the data of some of its customers, compromising sensitive information such as names, addresses, and emails.
The cyberattack, which was carried out by hackers who used the stolen data to trick Coinbase's customers into moving their funds to accounts linked to the attackers, has left the company with a projected loss of $180 million to $400 million. However, rest assured that customers who lost money will not be left out in the cold, as Coinbase has pledged to reimburse them.
According to Reuters, Coinbase received an email from the threat actor last May, stating that they had information on customer accounts and internal documents, and were asking for a $20 million ransom. But instead of paying off the hackers, Coinbase took a different approach. They alerted law enforcement and established a reward of the same amount for information that would lead to the arrest of the attackers.
"Instead of funding criminal activity, we have investigated the incident, reinforced our controls, and will reimburse customers impacted by this incident," Coinbase said in a statement. The company also issued a stern warning to its customers, stating that "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." They added that if someone receives such a call or text, they should hang up the phone immediately.
As a result of the cyberattack, Coinbase has fired all the involved overseas customer support agents who stole the customer data. The company has also assured its customers that "no passwords, private keys, or funds were exposed, and Coinbase Prime accounts are untouched."
The $400 million loss is relatively small compared to Coinbase's massive assets, which total $328 billion, and its market capitalization of over $67 billion. However, this incident highlights the growing concern of blockchain hacks, with losses from such attacks reaching a staggering $2.2 billion in 2024.
Earlier this year, another cryptocurrency exchange platform, ByBit, fell victim to a record-breaking $1.5 billion hack, which the FBI suspects was the work of North Korean hackers. As the crypto industry continues to evolve, it's essential for companies like Coinbase to prioritize security and protect their customers' sensitive information.
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