Coinbase (COIN.O) expects data breach to cause up to $400 million in losses.

Coinbase (COIN.O) expects data breach to cause up to $400 million in losses.

Cryptocurrency exchange Coinbase (NASDAQ: COIN) disclosed that it could incur losses between $180 million and $400 million due to a recent cybersecurity breach. The incident, which occurred on May 11, compromised account information for a portion of its user base. The news sent the company's stock down by approximately 3% in Thursday's premarket trading.

According to Coinbase, the company received a message from an unidentified threat actor claiming to possess sensitive data related to customer accounts and internal documentation. While login credentials and passwords were not compromised, attackers gained access to personal details such as names, email addresses, and physical addresses. Coinbase acknowledged the breach and confirmed that some individuals were deceived into transferring funds.

The attack comes at a critical time for Coinbase, as the company prepares to join the S&P 500 index—an important milestone for the broader crypto sector. The company traced the data breach to contractors and support staff based outside the U.S., who were allegedly paid by the hackers to extract information from internal systems. Those implicated were immediately terminated.

Coinbase pledged to fully reimburse customers who suffered financial losses as a result of the breach. The company refused to pay the hackers' $20 million ransom demand, instead offering a $20 million reward for credible information leading to the identification and capture of those responsible.

The incident underscores the ongoing vulnerabilities in the crypto ecosystem. Earlier this year, rival platform Bybit reported the theft of crypto assets valued at approximately $1.5 billion, described as the largest heist in the sector's history. According to blockchain analytics firm Chainalysis, hackers stole an estimated $2.2 billion from crypto platforms in 2024 alone, marking the fourth consecutive year in which annual thefts exceeded the $1 billion mark.

References:
[1] https://ih.advfn.com/market-news/article/10299/coinbase-faces-up-to-400-million-loss-following-cybersecurity-breach