On May 11, a Coinbase data breach disclosed how hackers bribed overseas support staff to steal customer data and launch phishing scams, after the crypto exchange refused a $20 million extortion demand, according to a blog post by Coinbase.
The Coinbase security breach began as hackers harvested personal details like names, addresses, phone numbers, emails, photos of government-issued IDs, concealed account numbers, and even partial Social Security numbers of a “small subset of users,” hoping to compile a list of clients and pose as Coinbase representatives to trick victims into sending their cryptocurrency assets.
According to Coinbase’s blog post, “Protecting Our Customers – Standing Up to Extortionists,” “Scammers — related to this incident or not — may pose as Coinbase employees and try to pressure you into moving your funds,” adding further, “remember, Coinbase will never ask for your password, 2FA codes, or for you to transfer assets to a specific or new address, account, vault or wallet.”
Fortunately, the hackers did not obtain passwords, private keys, or two-factor authentication codes and could not directly access wallets or user accounts. However, they used a wide breach in data and phishing attacks, having successfully influenced some of the users to send cryptocurrency to phishing addresses.
Coinbase Security Issues
Coinbase received an email from an actor in threats, claiming to have inside information and was willing to pay $20 million to avoid sharing with the public.
The firm didn’t pay but reported instead to the authorities. In response, Coinbase claimed that it “immediately terminated the individuals involved” and vowed to “press criminal charges.”
CEO Brian Armstrong described in a video message that “Less than 1% of our monthly transacting users had their records accessed, “without giving a number, adding, “we’re actually relocating some of our customer support operations as a result of this Coinbase data breach,” to improve internal security controls so that such attacks would no longer be possible.
Due to the extent of the Coinbase data breach, the company is now providing a $20 million reward for information that leads to the arrest of the perpetrators of the scheme.
“For these would-be extortionists, or anyone seeking to harm Coinbase customers, know that we will prosecute you and bring you to justice,” Armstrong said.
The company is also promising to repay retail customers who unknowingly transferred funds to scammers because of the Coinbase leaks before the blog post that clearly stated they are working on the issue case-by-case on a daily basis. Coinbase security measures have already begun notifying the victim customers and requesting they remain alert as the stolen data could be used for additional identity theft or fraud.
Inside Telecom provides you with an extensive list of content covering all aspects of the tech industry. Keep an eye on our Cybersecurity sections to stay informed and up-to-date with our daily articles.