Data breach leads to potential financial loss: Coinbase alerts of $400 million impact following cyber attack
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Coinbase, the popular crypto exchange, has taken a stab at cyber criminals, disclosing a colossal hack that could cost the company a whopping $180-$400 million. This devastating breach has sent shares tumbling by three percent in the pre-market trading on a gloomy Thursday.
The unknown threat actors sent an email on 11 May, claiming access to sensitive customer details and internal company documents. Coinbase confirmed that the attackers managed to swipe names, addresses, and emails. However, they didn't swoop up login credentials and passwords2.
This breach strikes at a crucial juncture for Coinbase, as the firm is poised to join the S&P 500 - a monumental achievement for both the company and the burgeoning crypto industry. In a candid blog post, Coinbase revealed that employees and contractors in support roles outside the US were bribed by the attackers to divulge information from internal systems4. Those involved have since been axed, as per the company's statement.
Coinbase turned a cold shoulder to the hackers' $20 million ransom demand and instead offered a reward of the same amount for info leading to the identification of the culprits. The exchange also promised to foot the bill for affected customers who fell victim to social engineering tricks and transferred funds to the attackers3.
"Rather than bankrolling illicit activities, we've delved into the incident, reinforced our defenses, and vow to reimburse customers harmed by this attack," Coinbase penned4.
Nick Jones, CEO of crypto platform firm Zumo, raised an alert about the escalating sophistication of cyber criminals and advocated for broad cooperation to protect customers1. He highlighted the EU's recently enacted digital operational resilience act (DORA) as a key strategy that industries, including finance, should adopt.
"As our sector evolves, it's essential to abide by these principles and collaborate to strengthen our defenses," Jones declared1.
This attack isn't an isolated incident in the crypto sphere. In the last few months, other prominent crypto firms like Bybit and Dior have also been victimized by hackers5. Moreover, a string of retail outlets in the UK have been felled by similar attacks, including M&S, Co-op, and Harrods6. Earlier today, Dior too reported a breach6.
M&S confessed this week that its systems are still grappling with the aftermath of a ransomware attack that disrupted online services and put customer data at risk5.
- In the wake of Coinbase's substantial loss due to cyberattacks, Nick Jones, CEO of crypto platform firm Zumo, emphasized the need for collaboration among industries like finance to strengthen cybersecurity defenses and combat the escalating sophistication of cybercriminals.
- As Coinbase grapples with a significant financial setback due to a hack, the digital operational resilience act (DORA) introduced by the EU could potentially serve as a valuable strategy to bolster the resilience of the finance and crypto industries against cybersecurity threats.
