Coinbase Reveals Cybercrime Attack: Hackers Bribe Staff to Steal Customer Data
In a shocking revelation, Coinbase, the largest cryptocurrency exchange operator in the United States, has reported that cybercriminals bribed overseas support agents to steal customer data, which was then used in social engineering attacks. According to a Securities and Exchange Commission filing, the incident may cost Coinbase up to $400 million to fix.
The breach was discovered after Coinbase received an email on May 11 from an individual claiming to have obtained sensitive information about certain customer accounts, as well as internal documentation related to customer service and account management systems. The company’s shares plummeted more than 6% in morning trading following the announcement.
The email, which was reportedly sent by the hackers, demanded a ransom of $20 million in exchange for not publicly disclosing the stolen information. However, Coinbase has stated that it will not pay the demand and is instead cooperating with law enforcement to investigate the incident. As quoted in the CNBC report, Coinbase stated, "Cyber criminals bribed and recruited a group of rogue overseas support agents to steal Coinbase customer data to facilitate social engineering attacks."
The stolen data included sensitive information such as names, addresses, phone numbers, and emails, as well as masked bank account numbers and identifiers, and the last four digits of Social Security numbers. Government ID images and account balances were also compromised. However, Coinbase has assured customers that passwords and private keys were not compromised, and Coinbase Prime accounts were untouched.
According to Coinbase, the breach was detected independently in previous months, and the company immediately terminated the employees involved, warned customers whose information may have been accessed, and enhanced its fraud monitoring protections. The threat actor paid overseas contractors and employees in support rolls to obtain the information.
In response to the attack, Coinbase has established a $20 million reward fund for information leading to the arrest and conviction of the criminals responsible. As stated in the CNBC report, Coinbase said, "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 incident highlights the growing threat of cybercrime in the cryptocurrency space. Coinbase, which operates the largest crypto exchange in the US, has been expanding its global reach and recently announced an acquisition that is expected to help it gain entry to the benchmark S&P 500 stock index. CEO Brian Armstrong has expressed his ambition to make Coinbase "the No. 1 financial services app in the world" in the next five to 10 years.
The company has assured customers that it will reimburse those who were tricked into sending funds to the attacker. As reported by CNBC, Coinbase is working closely with law enforcement to bring the perpetrators to justice. This incident serves as a reminder of the importance of robust security measures and vigilance in the face of evolving cyber threats.
The news of the breach has significant implications for the cryptocurrency market, and investors are closely watching the developments. As the largest cryptocurrency exchange operator in the US, Coinbase’s security measures are under scrutiny. The company’s response to the incident and its commitment to cooperating with law enforcement and protecting its customers’ data will be closely watched in the coming days.
This breaking news story will continue to be updated as more information becomes available.
Source: CNBC
