Coinbase, one of the world’s largest cryptocurrency exchanges, recently faced a significant data breach incident. Here is a detailed account:
The Data Breach Incident
Scope of Impact: On May 15, Coinbase disclosed that a data breach had affected less than 1% of its active monthly users.
Cause of the Breach: Threat actors bribed a group of overseas support agents with access to Coinbase’s internal systems. These insiders leaked sensitive data, enabling the threat actors to impersonate Coinbase staff and carry out social engineering scams.
Compromised Data: The leaked data included names, contact details, identity documents, and masked bank and social security information. However, Coinbase emphasized that users’ login credentials, private keys, and core infrastructure, such as prime wallets, remained secure.
Response to the Ransom Demand
Rejection of Ransom: After the breach, the attackers attempted to extort $20 million in Bitcoin from Coinbase. But the company firmly rejected the demand, stating that it would not give in to the criminals’ demands.
Reward Fund Establishment: Instead of paying the ransom, Coinbase set up a $20 million reward fund. The fund is intended to encourage people to provide information that leads to the arrest and conviction of the criminals responsible for the attack.
Follow – up Actions
Termination of Compromised Insiders: Coinbase promptly terminated the employment of the compromised insiders and vowed to take legal action against them.
Cooperation with Law Enforcement: The company is working closely with law enforcement agencies to conduct a thorough investigation into the breach. It is also implementing stricter access controls and enhancing fraud monitoring and scam alerts.
Customer Compensation: Coinbase has announced that it will compensate affected users. The company has alerted affected customers about the risks of data misuse and provided advice on enhancing account security, such as enabling two – factor authentication and setting up withdrawal allow – listing. In addition, Coinbase plans to open a US – based support hub to reduce reliance on overseas contractors.
This incident has attracted widespread attention in the cryptocurrency industry, raising concerns about the security of user data on cryptocurrency exchanges and the effectiveness of security measures.
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