Coinbase is under intense criticism following a major security breach tied to its outsourcing of customer support to an Indian contractor. The incident has resulted in an estimated $400 million loss for the exchange and sparked serious concerns about data safety.
According to Reuters, a female employee of TaskUs, Coinbase’s third-party service provider, was caught capturing photos of sensitive customer information. It was later found that many individuals joined in committing the dangerous actions.
As a result, the company let go of about 200 TaskUs employees who played a part in the breach. It was found that Coinbase noticed the breach in January but only made the public aware in May, which left people questioning their slow reaction.
For fear of the information being released, the hackers demanded $20 million to keep it locked up. Rather than giving in to the extortion, Coinbase reviewed the incident internally and searched for who was involved.
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Outsourcing Customer Support Raises Major Security Questions
The decision to rely on third-party support staff in another country has attracted sharp backlash from experts and the crypto community. Adam Cochran of Cinneamhain Ventures openly criticized Coinbase for prioritizing cost over control and security.
A number of analysts point out that relying on external firms for sensitive work raises the risk of internal intervention and weakens data protection. As a result of this breach, there has been more demand for firms to create dedicated teams to deal with customer accounts.
The involvement of hundreds of employees and the scope of the breach have raised significant questions about oversight and responsibility. Since user trust is now affected, Coinbase should clearly communicate its strategies to increase security from within and from outside.
Coinbase has made no clear public statement explaining why it took so long to inform users or how the attack happened. Regulators will check what the company has been doing, and they may take additional action shortly.
The $400 million breach tied to outsourced support has placed Coinbase at the center of a growing security debate. While the investigations go on, the exchange must try to restore users’ trust and continue strengthening its protection.
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