Coinbase Rejects $20M Ransom, Offers Matching Bounty to Catch Blackmailers
In a bold move against cyber extortion, Coinbase has refused a $20 million ransom demand from criminals who obtained sensitive customer data through bribed overseas support agents. Instead, the cryptocurrency exchange has announced a $20 million bounty for information leading to the arrest and conviction of the perpetrators.
The breach affected less than 1% of Coinbase's monthly transacting users and did not compromise passwords, private keys, or user funds. However, the stolen data included names, contact information, masked Social Security and bank account numbers, government-issued IDs, and transaction histories.
The attackers threatened to release this information unless Coinbase paid the ransom. CEO Brian Armstrong publicly declined the demand, stating, "We said no."
Coinbase has pledged to reimburse any customers who suffered losses due to the breach and is collaborating with law enforcement to pursue the harshest penalties against the criminals. The company is also enhancing its security measures, including relocating some customer support operations to the U.S., strengthening insider threat detection systems, and implementing mandatory scam-awareness prompts and ID checks for flagged accounts.
This incident underscores the growing threat of social engineering attacks in the crypto industry. Coinbase's proactive response sets a precedent for how major exchanges can confront such challenges head-on.