Coinbase to Incur Up to $400M in Costs Following Cybersecurity Breach

Cryptocurrency exchange Coinbase has announced that a recent cyberattack could cost the company up to $400 million. The breach, which occurred when hackers made payments to contractors and employees to access internal systems, affected less than 1% of customer data. Using the information obtained, the attackers impersonated Coinbase and deceived users into sending them cryptocurrency. Although the attackers demanded a $20 million ransom, Coinbase refused to pay and instead committed to reimbursing all affected customers.

The incident caused Coinbase’s share price to drop by 4.1%, just days before it is set to join the S&P 500 index. The company has filed a report with the U.S. Securities and Exchange Commission, estimating total costs from the breach, including reimbursements and other potential liabilities, to range from $180 million to $400 million. Employees who were found to have shared customer data have been terminated.

Coinbase is now cooperating with law enforcement and has offered a $20 million reward for information leading to the arrest of the hackers. It also warned customers to be wary of phishing attempts and emphasized that it would never request passwords, 2FA codes, or ask users to transfer funds to unfamiliar addresses. The company acknowledged the inconvenience caused and promised transparency moving forward.