Coinbase reports that customers' personal information has been stolen in a data breach

Coinbase had a data breach; customer and corporate data were stolen, leading to financial losses and boosted security efforts.

: Coinbase recently confirmed a security breach where a hacker accessed customer data, including identity documents, contact details, and financial information. This breach was facilitated by external contractors and employees who exploited their system access. Despite a $20 million ransom demand, CEO Brian Armstrong has stated that Coinbase will not comply. The breach affects less than 1% of its 9.7 million monthly users, with expected incident-related costs ranging from $180 million to $400 million.

Coinbase has been hit by a data breach, compromising sensitive customer information, including government-issued documents, phone numbers, and email addresses. The incident surfaced after a hacker contacted the company demanding a ransom of $20 million to prevent the release of the stolen data. This demand was highlighted in a social media post by CEO Brian Armstrong. Coinbase, however, remains firm in not yielding to extortion attempts.

Coinbase clarified that the breach was not due to a failure of its core security infrastructure but rather involved contractors and employees outside the U.S. who misused their system access for monetary gain. These individuals have since been terminated. The company promptly informed the affected customers of the potential misuse of their compromised data, as indicated in the regulatory filing with U.S. officials and their public statements.

The affected user base was relatively minor, accounting for less than 1% of Coinbase's 9.7 million active monthly customers as per the latest reports. For transparency and legal compliance, Coinbase detailed these findings in a U.S. Securities and Exchange Commission (SEC) filing, emphasizing its commitment to safeguarding customer data integrity. The company's spokesperson, Natasha LaBranche, shared further details, indicating that the breach was detected months ago, but has only now been disclosed.

The breach not only exposed user data but also included some internal documentation and account balance information. Coinbase anticipates a significant financial toll from this incident, projecting expenses between $180 million and $400 million for damage control, remediation efforts, and customer compensation. The company has begun strengthening its security defenses by opening a new U.S.-based support hub to reinforce its future security posture.

Coinbase also reassured that it is taking proactive measures to enhance its security architecture and prevent future incidents. The crypto platform remains vigilant, underscoring the sophisticated nature of modern cyber threats and the importance of robust, layered security systems. Through blogs and official updates, it affirmed its commitment to transparency while navigating the complexities of the digital economy. Furthermore, Coinbase's CEO assured users through open communications that a zero-tolerance policy against extortion will be upheld.

Sources: Coinbase blog post, U.S. SEC filing, TechCrunch

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