Coinbase Stood its Ground Against Hackers' Ransom Demand: CPO Faryar Shirzad
Potential cyber assault on Coinbase could lead to financial losses of up to $400 million for the digital currency exchange.
In a stark turn of events, Coinbase Global's shares dipped more than 7% on Thursday following the crypto exchange's admission of a cyberattack that potentially could cost the company a hefty $400 million.
The vicious digital assault compromised customer account information, affecting a "limited" user base, but fortunately, passwords and private keys remained secure, as confirmed in a regulatory filing. The breached data included sensitive information such as names, addresses, phone numbers, emails, and government ID images.
*COINBASE FUNDS $25M FOR 2026 PRO-CRYPTO SUPER PAC INFLUENCE*
On May 11, an anonymous malicious actor emailed Coinbase, threatening to leak customer account information and internal documents if a $20 million ransom was not paid.
Interestingly, the hackers manipulated multiple contractors and employees outside the U.S., bribing them to gain access to the customer data. Post-discovery, the offending parties were promptly terminated and handed over to law enforcement agencies.
*COINBASE SLAMS TRADITIONAL PAYMENT SYSTEMS WITH $15M NBA AD SPEND*
In an official blog post, Coinbase revealed that the unscrupulous insiders used their access to customer support systems to swipe account data from a confined clientele.
The embattled cryptocurrency exchange opted not to capitulate to the hackers' ransom demand and instead plans to reimburse affected customers. They anticipate expenses related to remediation costs and customer reimbursements to range between $180 million and $400 million, according to the regulatory filing.
*COINBASE LAWSUITS SEC AND FDIC OVER CRYPTO REGULATION INFO*
Coinbase has remained resolute, stating that they will "not pay the $20 million ransom demand we received" and are working closely with law enforcement to bring the culprits to justice. As an additional measure, they are offering a $20 million reward for information leading to the arrest and conviction of those responsible for the attack.
The cyberattack announcement coincides with the U.S. Securities and Exchange Commission starting an investigation into whether Coinbase has exaggerated its user numbers.
Additional reports suggest that the SEC and Coinbase have yet to comment on the matter following FOX Business' request for comment.
- The cyberattack on Coinbase potentially could cost the company a hefty $400 million in expenses related to remediation costs and customer reimbursements.
- Coinbase opted not to pay the $20 million ransom demand from the hackers and instead plans to reimburse affected customers.
- Coinbase's decision not to pay the ransom demand demonstrates their commitment to cybersecurity in business and technology.
- Besides the cyberattack, Coinbase is also embroiled in lawsuits with the SEC and FDIC over crypto regulation information.
