Coinbase says some user data stolen in cyberattack

Coinbase (COIN) said in a regulatory filing that on May 11, Coinbase, Inc., a subsidiary of Coinbase Global, received an email communication from an unknown threat actor claiming to have obtained information about certain Coinbase customer accounts, as well as internal Coinbase documentation, including materials relating to customer-service and account-management systems. The communication demanded money in exchange for not publicly disclosing the information. The threat actor appears to have obtained this information by paying multiple contractors or employees working in support roles outside the United States to collect information from internal Coinbase systems to which they had access in order to perform their job responsibilities. These instances of such personnel accessing data without business need were independently detected by the company’s security monitoring in the previous months. Upon discovery, the company had immediately terminated the personnel involved and also implemented heightened fraud-monitoring protections and warned customers whose information was potentially accessed in order to prevent misuse of any compromised information. Since receipt of the email, the company has assessed the email to be credible, and has concluded that these prior instances of improper data access were part of a single campaign that succeeded in taking data from internal systems. The company has not paid the threat actor’s demand and is cooperating with law enforcement in the investigation of this Incident. The Incident did not involve the compromise of passwords or private keys, and at no time were any of the targeted contractors or employees able to access customer funds. The company is continuing to review and bolster its anti-fraud protections to mitigate the risk that the compromised information could be used in social-engineering attempts. To the extent any eligible retail customers previously sent funds to the threat actor as a direct result of this Incident, the company intends to voluntarily reimburse them after it completes its review to confirm the facts. The company is also in the process of opening a new support hub in the United States and taking other measures to harden its defenses to prevent this type of incident. Based on the information available to the company on the date hereof and based on facts that continue to evolve, the company has preliminarily estimated expenses to be within the range of approximately $180M-$400M relating to remediation costs and voluntary customer reimbursements relating to this Incident. The company plans to aggressively pursue all remedies. Shares of Coinbase are down 4% in early trading to $252.68.