The cryptocurrency exchange Coinbase has announced a data breach affecting less than 1% of its users. Malicious actors gained access to confidential information by bribing customer support employees working overseas. In response to this situation, the exchange promises to reimburse all losses by establishing a $20 million fund to catch the perpetrators.
This is reported by Finway
Details of the User Data Breach
The user data breach included sensitive information, such as Know Your Customer (KYC) verification data, addresses, phone numbers, copies of identification documents, as well as some corporate documentation and encrypted banking information. According to documents submitted to the U.S. Securities and Exchange Commission (SEC), on May 11, 2025, the company received an email from the attacker demanding money for not disclosing the stolen information.
The breach is estimated to potentially lead to remediation costs ranging from $180 million to $400 million. Although the company has not disclosed the exact date when this incident occurred, it assures that the incident did not result in any immediate operational losses.
Community Reaction and Company Commitments
The data breach has sparked criticism within the crypto community. Wintermute CEO Evgeny Gaevoy commented on the situation, stating that:
“Despite the fact that Coinbase did not disclose this (much, much) earlier, this is the dark side of the nonsensical KYC/AML regime we live in. By making it easier for law enforcement and geopolitical games, we simultaneously sacrifice our privacy, impose a huge tax on virtually all businesses, and facilitate robberies, kidnappings, and crimes for criminals.”
The attackers aimed to build a customer database for future phishing attacks. It is worth noting that previously, crypto detective ZachXBT pointed out that no centralized cryptocurrency exchange faces as much fraud as Coinbase. For the nondisclosure of data, the attackers demanded $20 million; however, the exchange refused to pay this amount, instead creating a $20 million fund to reward individuals who assist in apprehending the criminals.