Coinbase Data Breach Will 'Lead to People Dying,' TechCrunch Founder Says

A recent data breach on Coinbase has sparked a heated debate about the importance of protecting user information and holding executives accountable. According to Michael Arrington, founder of online news publication TechCrunch, the breach will have devastating consequences for those affected, including high-net-worth crypto holders who are now being targeted by kidnappers.

"This hack—which includes home addresses and account balances— will lead to people dying . It probably has already," Arrington tweeted in a poignant warning about the severity of the situation. He emphasized that the human cost of this breach far outweighs the estimated $400 million that Coinbase plans to spend reimbursing affected customers.

"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 stated. He highlighted the alarming fact that data exposed in the breach includes sensitive information such as names, addresses, phone numbers, emails, government-ID images, and more.

Arrington believes that the root cause of this issue lies in the intersection of corporate profit maximization and lax laws on penalties for hacks like these. He emphasized that combining know-your-customer (KYC) regulations with a focus on profits has led to companies prioritizing shareholder interests over customer safety. "Combining these KYC laws with corporate profit maximization and lax laws on penalties for hacks like these means these issues will continue to happen," he tweeted.

"Both governments and corporations need to step up to stop this. As I said, the cost can only be measured in human suffering," Arrington added. He called for stiffer penalties for executives who fail to adequately protect customer information, suggesting that prison time should be a consideration.

However, not everyone agrees with Arrington's stance. Former Coinbase chief technology officer Balaji Srinivasan pushed back on the idea of punishing executives, arguing that regulators are forcing KYC laws onto unwilling companies. When asked about this by Arrington, he responded: "When enough people die, the laws may change." The debate surrounding this issue highlights the need for a more nuanced discussion about balancing customer safety with business interests.