- Insider bribery in India led to sensitive customer data access, showing human vulnerability outweighs tech flaws.
- Coinbase refused the $20M ransom and offered a $20M reward, highlighting proactive incident response.
- Early detection in January shows monitoring matters; arrests continue, emphasizing law enforcement collaboration.
Coinbase is dealing with a serious security breach after hackers used a bribed support agent in Hyderabad, India, to access customer data. The attack happened in May 2025, targeting people but not the usual blockchain or software itself.
This allowed the hackers to obtain personal details such as names, addresses, and emails, but passwords and private keys remained protected. They originally demanded a ransom of $20 million, which was refused by Coinbase.
Instead of paying the hackers, Armstrong announced a reward of $20 million for information that can lead to the arrest of the hackers. The company also claims that the cost associated with the breach can be between $180 million to $400 million.
In a post on X, Armstrong emphasized, “We have zero tolerance for bad behavior and will continue to work with law enforcement to bring bad actors to justice.” The first arrest has already been made, with more expected.
Inside the Hack and Its Implications
Chief Security Officer Philip Martin explained, “What these attackers were doing was finding Coinbase employees and contractors based in India… and bribing them in order to obtain customer data.” Hence, the breach underscores that human error or misconduct often remains the weakest link in cryptocurrency security.
Coinbase noticed unusual activity as early as January 2025, but the hackers didn’t make their ransom demand until May. This shows why companies must constantly watch employees and contractors handling sensitive information.
Besides the security fallout, Coinbase continues to face regulatory and legal challenges. The exchange has filed lawsuits against several U.S. states, including Michigan, Illinois, and Connecticut, claiming overreach in regulating prediction markets.
Additionally, Coinbase retains control over most of the $122 billion in spot-Bitcoin ETF tokens and continues to influence U.S. politics, contributing over $52 million to campaigns in the 2024 cycle. Consequently, the company remains a major player in both financial and political spheres.
