The U.S. Department of Justice (DOJ) has launched an investigation into a data breach at Coinbase involving contracted customer service agents based in India, who allegedly accepted bribes to grant unauthorized access to sensitive user data.
Bloomberg reported on May 19 that DOJ investigators are working alongside other U.S. and international law enforcement agencies following Coinbase’s public disclosure of the breach on May 15. The crypto exchange revealed that a group of outsourced customer support workers misused their access privileges to steal data belonging to a limited number of users. The individuals involved were promptly terminated.
Coinbase’s Chief Legal Officer, Paul Grewal, emphasized the company’s cooperation with the ongoing investigation and expressed support for criminal prosecution of the implicated parties.
“We have notified and are working with the DOJ and other US and international law enforcement agencies and welcome law enforcement’s pursuit of criminal charges against these bad actors,”
said Paul Grewal
Although Coinbase asserted that no passwords, private keys, or customer funds were exposed during the breach, the compromised data reportedly enabled a series of sophisticated social engineering attacks. Victims included high-profile individuals, such as a Sequoia Capital partner, and the total losses are estimated to be as high as $400 million.
Adding to the severity of the breach, the attackers allegedly attempted to extort $20 million from Coinbase in exchange for keeping the incident under wraps—an offer the exchange firmly rejected.
The breach has triggered legal action from affected users, who claim Coinbase failed to protect their data adequately. Among the plaintiffs is Ed Suman, a retired artist who alleges he lost $2 million to the scammers.
Meanwhile, Coinbase’s share price experienced volatility amid the DOJ investigation and an unrelated inquiry by the U.S. Securities and Exchange Commission (SEC), which is scrutinizing the accuracy of the company’s “verified user” metrics.
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