TaskUs hit with lawsuit alleging concealment of Coinbase data breach disclosure
In a shocking turn of events, TaskUs, a well-known outsourcing company, is facing allegations of a coordinated scheme involving the breach of sensitive account information and the concealment of its scope.
The amended class action against TaskUs, filed at the Southern District of New York on Tuesday, includes new claims of systemic security failures and concealment in a breach tied to Coinbase customer data. The breach, which originated in late 2024 and was disclosed by Coinbase in May, is estimated to have resulted in losses of up to $400 million.
According to the amended complaint, TaskUs allegedly fired its own human resources personnel tasked with investigating the breach in February, and ignored Section 5 of the FTC Act. This could suggest a company that was careless or misleading, as stated by Andrew Rossow, public affairs attorney and CEO of AR Media Consulting.
The complaint further alleges that TaskUs was involved in a scheme inside its India operations, where employees were allegedly bribed to photograph sensitive account information and pass it to criminals.
Coinbase, the cryptocurrency exchange, has since ended its relationship with TaskUs. Coinbase has also complained about systematic security failures and conspiracies to cover up the data breach involving customer data in India. The company has refused to pay TaskUs and has created a $20 million reward for information leading to arrests and convictions.
Coinbase notified affected users and regulators immediately and reimbursed impacted customers. Courts and regulators are now examining whether the compromised data was sensitive enough to expose people to identity theft or financial loss. They will also examine whether safeguards such as encryption or multi-factor authentication were employed, whether the risks were foreseeable, whether security promises aligned with reality, and whether consumers had any means to protect themselves.
TaskUs did not immediately return Decrypt's requests for comment. In its February Form 10-K filing, the company did not cite any factors pertaining to the Coinbase breach.
This development comes as a blow to TaskUs, a company known for its outsourcing services. The company employed around 300 employees who were dismissed in January due to the conspiracy. The case is currently under investigation, and updates are expected in the coming weeks.
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