- Coinbase expects to pay between $180 million and $400 million to customers following a large data breach.
- The breach exposed customer information, leading to successful phishing attacks by criminals posing as Coinbase staff.
- Sensitive data leaked included customer contact details and identity information such as passport data.
- Coinbase has begun compensating affected users and introduced new security measures.
- The company reported an extortion attempt linked to the breach and is cooperating with law enforcement.
Coinbase, a leading cryptocurrency exchange, reported that it plans to compensate customers impacted by a severe data breach with payments estimated between $180 million and $400 million. The breach made it possible for criminals to target users with phishing scams by using stolen customer information.
According to a recent SEC filing, Coinbase stated that the company’s internal systems and private encryption keys were not compromised. However, hackers gained enough data to mount effective phishing attacks, which tricked some customers into sharing their account details.
Details of the breach, described in Coinbase’s May 15 blog post, showed that attackers bribed offshore support contractors and staff to leak limited account data. The compromised information included contact details and important identity data, such as passport information. The attackers then used this data to launch phishing campaigns against impacted customers.
The company detected and responded to these incidents over several months, firing involved employees and contractors. Coinbase also issued warnings to affected customers. It said its main systems remained secure but emphasized that the leak led to notable customer losses from phishing incidents.
Compensation for affected users has already started, and Coinbase has put additional security measures in place. The company noted that projected reimbursement totals are preliminary and reflect its pledge to fully compensate customers.
Early warnings about the incident surfaced in February, when crypto investigator ZachXBT posted evidence of large-scale phishing campaigns connected to stolen Coinbase customer data. According to ZachXBT, the problem appeared widespread before Coinbase officially reported the breach.
The breach also led to an extortion attempt, with criminals demanding payment in exchange for keeping the incident undisclosed. Coinbase refused to pay and instead notified law enforcement. The company is now offering a $20 million reward for information leading to the capture of those responsible.
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