Coinbase Global said hackers bribed contractors or employees outside the US to steal sensitive customer data and demanded a $20 million ransom, in one of the most high-profile security breaches of a crypto trading platform.
The largest US crypto exchange said it won’t pay the ransom and estimated the incident could cost the San Francisco-based firm up to $400 million to remedy.
Criminals had offered cash to Coinbase customer support agents to copy customer data like names, addresses, account data and government ID images, the exchange said in a statement on Thursday. The attackers planned to use this data to pretend to be Coinbase and convince users to hand over their crypto, while demanding ransom from the exchange to cover it up.
Less than 1% of the exchange’s monthly transacting users were affected, Coinbase said. In addition to ramping up security controls for those affected, Coinbase said it would reimburse in full anyone who lost money. The exchange also said it is offering a $20 million bounty to anyone with information leading to the attackers’ arrest and conviction.
Based on the information currently available, Coinbase said preliminary estimates suggested it would face between $180 million to $400 million in “remediation costs and voluntary customer reimbursements” relating to the incident, according to a regulatory filing also released Thursday. A further review of potential losses, indemnification claims and potential recoveries could meaningfully increase or decrease this estimate, it added.
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