Coinbase has launched a $20 million bounty program in response to an extortion attempt by criminals who stole partial user data and demanded payment to prevent it from being leaked.
Coinbase Offers $20 Million Bounty After Blackmail Attempt Over Stolen User Data
The US-based crypto exchange has revealed that account data belonging to less than 1% of its monthly users was illegally obtained by hackers who bribed offshore support representatives for access to customer information.
The attackers then attempted to extort $20 million worth of Bitcoin from Coinbase, threatening to leak sensitive personal data including names, addresses, and government-issued IDs unless a ransom was paid.
Coinbase stressed that no passwords, private keys or funds were compromised and that Coinbase Prime accounts were not affected by the breach.
“We will not pay the racketeers. Instead, we are offering a $20 million reward to anyone who can provide information leading to the identification and conviction of those responsible,” he said.
Coinbase reported the incident to law enforcement and promised to fully refund affected users. The company did not disclose specifically how many accounts were affected but noted that the scope of the breach was limited.
This is not the first time Coinbase has faced extortion attempts, with the company issuing a bounty following a similar extortion attempt in 2022. The latest attack highlights the growing risks of insider threats and social engineering, particularly targeting crypto firms with large user bases.
The incident comes amid a broader wave of social engineering scams targeting Coinbase customers. According to blockchain researcher ZachXBT, many users have recently lost millions of dollars to scammers posing as Coinbase customer support representatives in phishing schemes.
Coinbase said it continues to strengthen its internal security practices and warned users to be wary of unwanted communications or suspicious links, especially those claiming to come from the company.
*This is not investment advice.
Continue Reading: Bitcoin Exchange Coinbase Announces Reward for Those Who Catch Hackers Stealing User Data! Here Are the Details
