In a bold response to a recent data breach and extortion attempt, Coinbase has announced a $20 million bounty program aimed at identifying and convicting the cybercriminals behind the attack. The breach, which affected account information belonging to less than 1% of Coinbase’s monthly active users, involved hackers bribing offshore support personnel to gain unauthorized access to sensitive customer data.
What Happened?
Hackers obtained partial user data — including names, addresses, and government-issued IDs — and attempted to blackmail the crypto exchange by demanding $20 million in Bitcoin to prevent the information from being leaked. In a firm stance against cyber extortion, Coinbase declared it would not pay the ransom. Instead, the company is offering a $20 million reward for actionable information leading to justice.
Crucially, Coinbase confirmed that no passwords, private keys, or user funds were compromised in the breach. Coinbase Prime accounts remained unaffected. The company has also assured that it will fully reimburse all affected users.
Estimated Compensation & Impact
According to reports, Coinbase expects to pay between $180 million and $400 million in compensation. While the exact number of impacted accounts has not been disclosed, the company emphasized that the breach was limited in scope.
A Pattern of Attacks
This isn’t the first time Coinbase has been the target of cybercriminals. A similar extortion attempt in 2022 also led to the announcement of a bounty. The latest breach underscores the increasing threat of insider attacks and sophisticated social engineering tactics aimed at cryptocurrency firms.
Blockchain investigator ZachXBT noted a broader trend of phishing scams, where bad actors impersonate Coinbase support agents to steal user funds. These incidents have cost users millions of dollars in recent months.
Strengthening Security & User Awareness
Coinbase says it continues to enhance its internal security protocols and is actively cooperating with law enforcement. The company also issued a warning to users to stay vigilant against unsolicited messages and suspicious links, especially those pretending to be official Coinbase communication.
Final Note
This incident highlights the importance of transparency, accountability, and proactive defense in the ever-evolving landscape of digital finance. While Coinbase’s strong stance and sizable bounty may deter future attacks, the broader crypto community must remain alert to the persistent threat of cybercrime.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
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