Key Takeaways:
- Nearly 70,000 Coinbase users were affected by a data breach that went undetected for almost six months, resulting in $400 million in damages.
- Attackers exploited social engineering tactics, extorted user data, and demanded a $20 million ransom, prompting Coinbase to fire involved contractors and promise user remediation.
- The breach intensified scrutiny of KYC data collection, with concerns rising over investor safety and privacy in the crypto industry.
A legal filing with the Maine Attorney General’s office has revealed that a major data breach at Coinbase affected 69,461 users, including 217 in Maine.
The breach occurred on December 26, 2024, but went undetected until May 11, 2025.
The Coinbase data leak was completely avoidable.
— Billions (@billions_ntwk) May 21, 2025
Companies need to stop leaking people’s data
This breach is another reminder: placing your personal data in a centralized company's hands makes it an irresistible target for attackers
ZK tech is how we fix this.
🧵👇 pic.twitter.com/npasn9KYLT
Attackers exploited social engineering tactics to deceive third-party customer service contractors, gaining access to users’ names, contact details, and addresses.
They then issued a $20 million ransom demand, which Coinbase refused.
The company terminated the contractors involved and pledged remediation for affected users.
The breach caused an estimated $400 million in damages, prompting a wave of lawsuits and a 7% drop in Coinbase’s stock.
High-profile individuals, such as Sequoia Capital partner Roelof Botha, were among the victims.
The U.S. Department of Justice has launched an investigation, though no further details have been released.
The incident has reignited concerns about Know Your Customer (KYC) data practices and the risks of collecting sensitive user information.
Experts warn such breaches increase threats of extortion, identity theft, and even physical harm to crypto holders.
As cyberattacks grow more sophisticated, the incident highlights the urgent need for stronger security measures in the digital asset industry.
About The Author
Efe Bravo, a seasoned journalist, delivers compelling insights into the cryptocurrency and blockchain industry.
His articles offer a deep dive into the latest trends, projects, and technological advancements shaping the future of digital finance.
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