Massive Insider Leak Goes Undetected for Months
Coinbase’s latest data privacy crisis just escalated. The crypto exchange giant disclosed that more than 69,000 users were impacted by a data leak involving bribed overseas support agents. While first reported on May 15, the breach itself occurred in December 2024 and remained undiscovered until May 11, 2025. The breach reportedly involved customer support insiders who were bribed to hand over sensitive user data. In return, the hackers demanded a $20 million ransom, which Coinbase refused to pay.
What Was Compromised?
Coinbase said the exposed data includes personally identifiable information (PII), such as - Full names, Home addresses, Email addresses and Phone numbers. However, no private keys or direct wallet access were compromised.
Company Response
Coinbase is offering affected users free credit monitoring and identity theft protection for one year via IDX, which includes:
- Identity restoration assistance
- Dark web monitoring
- A $1 million identity insurance policy
Rather than negotiating with extortionists, Coinbase is going on the offensive, offering a $20 million bounty for any information leading to the arrest of those behind the leak.
Legal Fallout Begins
The data leak has now triggered a wave of lawsuits across the U.S., with plaintiffs claiming:
- Negligence in security protocols
- Failure to safeguard user data
- Inadequate oversight of overseas contractors
Some lawsuits are demanding:
- Independent security audits
- Data purging
- Compensation for damages and mental distress
This incident comes amid increased scrutiny of Coinbase’s regulatory compliance and transparency, as it also faces a separate SEC investigation over user metrics from its 2021 IPO era.
Government Investigations Underway
Coinbase confirmed it’s working closely with the U.S. Department of Justice and international law enforcement to identify and prosecute the insiders and external attackers involved.
Public and Market Reaction
Despite assurances that no funds were at risk, the incident shook investor confidence. Coinbase stock (COIN) dropped over 7% in after-hours trading following the May 15 disclosure. Industry experts warn that this case could set a new precedent for data security standards in crypto, especially for companies with international operations and third-party vendors.
