Coinbase Refuses $20M Ransom Demand After Insider Data Breach
Cryptocurrency exchange Coinbase has revealed it was the target of a major cyberattack involving bribed overseas contractors. The incident, which compromised sensitive customer information, led to an extortion attempt demanding $20 million in ransom to prevent the release of stolen data. Rather than complying, Coinbase has taken an aggressive stance—offering the same amount as a reward for any information that leads to the identification and prosecution of those responsible.
According to Coinbase, the attack involved foreign contractors who were bribed to misuse their access to internal systems. These insiders were able to extract a large cache of customer data. Information stolen includes full names, email addresses, phone numbers, physical addresses, transaction history, government-issued ID images, and masked versions of Social Security and bank account numbers.
The company confirmed that despite the breach, no customer passwords, private keys, or cryptocurrency funds were accessed. Coinbase has assured users that their funds remain safe, but the attack has raised serious concerns about third-party risk and insider threats.
The financial impact of the breach is expected to be significant. Coinbase estimates potential costs of up to $400 million, which includes customer support, remediation efforts, and voluntary reimbursements to affected users. As a result, the company is increasing its investment in security and monitoring efforts.
Coinbase is working closely with law enforcement agencies to identify the perpetrators and prevent further data exposure. In a bold move to turn the tables on the attackers, it is offering a $20 million reward to anyone who can provide credible information leading to arrests and convictions.
This breach is a stark reminder of the vulnerabilities that even top-tier tech companies face in the era of remote work and global outsourcing. Coinbase’s decision to reward whistleblowers rather than pay criminals sets a strong precedent in cybersecurity response.
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