Coinbase has confirmed that a group of its users were recently targeted in a sophisticated insider collusion scam. After accessing personal customer information, the attackers demanded a $20 million ransom in Bitcoin.
According to Coinbase CEO Brian Armstrong in a video statement shared on X, the threat came as an email from cyber criminals. The attackers claimed they had obtained sensitive data and threatened to leak it unless paid in Bitcoin. Armstrong stated clearly that Coinbase refused to meet the demand.
The breach was traced to a small group of overseas customer support contractors whom the attackers bribed. With their limited permissions, they could access the personal details of others, including their names, addresses, and birthdays.
Although no account credentials or digital assets were directly compromised, the exposed information was used to deceive customers. Due to the attackers’ social engineering practices, some individuals sent their money to scam accounts.
Less than one percent of Coinbase’s monthly transacting users were involved in the problem. The exchange described the incident as unacceptable and immediately reinforced its operations and data security.
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The company Offers Rewards and Relocates Support Operations
To help bring those responsible to justice, Coinbase has announced a $20 million reward for any information that leads to their identification, arrest, and conviction. The company works closely with law enforcement agencies as part of its investigation.
Coinbase rescheduled specific customer support tasks away from the compromised countries to improve security. The company is implementing more controls and checks to avoid another similar breach.
All customers who lost money due to the scam will receive full compensation through the platform. The whole reimbursement process can be read on the official Coinbase website.
It made clear that it does not tolerate ransom payments and threats from insiders. The company also promised to become more open and offer education to prevent users from becoming victims of these schemes.
Coinbase’s swift response and refusal to pay the ransom highlights its tough stance on extortion. The company continues to work to secure its platform and protect its customers from insider-led threats.
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