The U.S. Department of Justice has initiated an investigation into a recent cybersecurity breach at Coinbase, the largest cryptocurrency exchange in the United States. The inquiry involves the DOJ’s criminal division in Washington and aims to uncover the details surrounding the incident, which involved cybercriminals bribing overseas Coinbase support staff to steal sensitive customer information.
Coinbase disclosed that the attackers gained access to personal data of approximately 1% of its users-around one million customers-by paying foreign contractors and employees in support roles to extract information from internal systems without authorization. The stolen data includes customer names, addresses, phone numbers, email addresses, masked bank account details, the last four digits of Social Security numbers, government-issued ID images such as passports and driver’s licenses, as well as account balance snapshots and transaction histories.
Despite the severity of the breach, Coinbase confirmed that login credentials, passwords, private keys, and funds were not compromised, and Coinbase Prime accounts remain secure. The hackers demanded a $20 million ransom to prevent public disclosure of the stolen data, but Coinbase has refused to pay and instead established a $20 million reward fund to incentivize information leading to the arrest and prosecution of those responsible.
Following discovery of the breach, Coinbase promptly terminated the implicated employees, enhanced fraud monitoring systems, and notified affected customers to mitigate potential misuse of their information. The company is also investing in anti-fraud technologies and plans to open a new U.S.-based support center to strengthen its defenses against similar attacks in the future.
Financially, Coinbase estimates the costs related to addressing the breach could reach up to $400 million, factoring in remediation efforts and customer compensation. The incident has also impacted Coinbase’s stock price, which dropped over 6% in morning trading following the announcement.
This investigation adds to Coinbase’s ongoing regulatory scrutiny, including a separate inquiry by the SEC into past disclosures about user numbers. Both Coinbase and the DOJ have declined to comment further on the probe as it continues.
