- Police in India arrested a former worker involved in a customer data theft and a 20-million-dollar ransom demand.
- Criminals bribed support staff to steal info from 70,000 users but Coinbase refused to pay and said no funds were lost.
- The breach was linked to outside contractors and could cost the company up to 400 million dollars to fix.
Coinbase CEO Brian Armstrong said an ex-employee has been arrested in India in connection with a customer-data theft that led to a US$20 million (AU$29 million) ransom demand.
Armstrong credited Hyderabad Police for the arrest in a post on X on Friday, stating “We have zero tolerance for bad behavior and will continue to work with law enforcement to bring bad actors to justice”.
Coinbase disclosed in May that criminals bribed some customer support agents to access and share customer information, including home addresses, banking details and user ID photos. The attackers later demanded payment for the data’s return, but Coinbase said it refused to pay.
The exchange estimated the breach could cost up to US$400 million (AU$610 million) to remediate, reflecting expenses such as customer support, investigation, and security measures.
A legal filing cited in the aftermath said nearly 70,000 users had data compromised in December, though the company said no customer funds were stolen in the incident and that private keys were not compromised.
The episode has drawn scrutiny to Coinbase’s internal controls around hiring and oversight for support roles, because the breach relied on insider access rather than a direct intrusion into Coinbase’s core systems.
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Breach Linked to TaskUs Agents
Coinbase’s customer-data breach has been linked to support agents working for TaskUs, a Texas-based outsourcing firm with operations in India, according to a Fortune investigation.
TaskUs told Fortune it identified two employees who it said were “recruited by a much broader, coordinated criminal campaign against [Coinbase]” that also affected other service providers supporting the exchange.
The arrest also comes as Coinbase-related fraud cases draw increased attention. One week earlier, the Brooklyn District Attorney’s Office indicted Ronald Spektor, 23, on 31 counts for allegedly stealing US$16 million (AU$24.4 million) from around 100 Coinbase users through a separate phishing scheme.
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