The world’s third-largest cryptocurrency exchange was hit with a cyber attack that could cost it $400million in reimbursement expenses.
Coinbase revealed last week that it received a threatening email on May 11 claiming to have information on some customer accounts and company documents.
The hackers managed to collect the sensitive data by paying several employees and contractors outside of the US. Coinbase said that all of the involved workers have been fired.
Hackers stole customers’ names, emails and addresses, but did not access their login information or passwords, according to Coinbase.
Coinbase plans to reimburse all of its customers who were tricked into sending money to the actors. The total is estimated to be between $180million and $400million.
On Monday, Coinbase’s chief legal officer, Paul Grewal, said they notified the US Department of Justice and other international law enforcement agencies and ‘welcome law enforcement’s pursuit of criminal charges against these bad actors’.
Coinbase has declined to pay the $20million ransom and is instead working with the law enforcement agencies and offering a $20million reward for information on the culprits.
The hack happened days before Coinbase was expected to join the S&P 500 index.
Arrington Capital and TechCrunch founder Michael Arrington said he is a longtime investor and champion of Coinbase, but is disappointed in the company using the ‘cheapest option for customer service’. He opined that the breach ‘will lead to people dying’.
‘It probably has already. The human cost, denominated in misery, is much larger than the $400m or so they think it will actually cost the company to reimburse people,’ wrote Arrington on X (formerly Twitter) on Monday.
‘The consequences to companies who do not adequately protect their customer information should include, without limitation, prison time for executives.’
It happened only a few months after North Korean hackers executed what is considered the biggest crypto heist in history, stealing $1.5billion inEthereum tokens from ByBit.
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