Coinbase Says Recent Cyberattack Cost Could Total $400m

Coinbase, the largest crypto exchange in the United States, has revealed that a recent cybersecurity breach affecting some of its users may cost the company between $180 million and $400 million. The estimated loss doesn’t include the $20 million ransom demand made by the attackers, which Coinbase firmly declined to pay.

According to the company, although the hackers accessed personal details like names, home addresses, and email accounts, they did not manage to obtain login information or passwords. However, some users were tricked into transferring funds to the attackers, and Coinbase has promised to reimburse those affected.

The attack involved multiple external contractors and overseas support staff who were bribed by the hackers to gain unauthorized access to internal systems. All employees connected to this breach have since been terminated. Rather than give in to the extortion attempt, Coinbase is collaborating with law enforcement and has offered a $20 million reward for information that leads to the identification of those responsible.

In a statement, Coinbase emphasized its stance against paying cybercriminals, noting that it chose to strengthen internal protections and investigate the incident thoroughly while ensuring affected users are compensated. The company disclosed that it was first contacted by the attackers on May 11 via email, where the perpetrators claimed they had internal documents and data related to some customer accounts.

This breach comes at a critical time for the exchange as it prepares to be added to the S&P 500 index—an important step for legitimizing cryptocurrency within mainstream finance.

Meanwhile, Coinbase is under the lens of the U.S. SEC, which is reportedly looking into whether the company misrepresented user statistics. Sources close to the matter suggested that the regulator’s focus is on the “verified user” metric.

Questions were raised about whether inaccuracies in user numbers hinted at shortcomings in the company’s adherence to know-your-customer (KYC) regulations. However, a Coinbase representative denied that the SEC was investigating their compliance with KYC or Bank Secrecy Act requirements.

One insider stated that the SEC has not pursued questions related to those specific compliance standards, particularly since it dropped an earlier case against Coinbase regarding registration violations.

The recent incident underscores how cybersecurity remains a persistent and costly challenge for the cryptocurrency industry. In a separate breach earlier this year, Bybit, one of the largest global exchanges, lost an estimated $1.5 billion in digital assets.

In total, crypto platforms suffered around $2.2 billion in losses from hacking in 2024, marking the fourth consecutive year in which attacks exceeded the $1 billion mark, according to Chainalysis. Industry actors like Riot Platforms Inc. (NASDAQ: RIOT) may be refining their cybersecurity systems in order to minimize being targeted by these increasingly brazen hackers.

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