Coinbase, the largest cryptocurrency exchange in the US, revealed that a recent cyber-attack targeting a small subset of its customers could cost the company between $180m and $400m. Despite hackers demanding a $20m ransom, Coinbase decided not to pay. The breach resulted in the theft of customer data such as names, addresses, and emails, but login credentials remained secure. The company pledged to reimburse customers who fell victim to sending funds to the attackers.

The attackers, who enlisted contractors and employees outside the US to gather internal information, were swiftly identified and terminated by Coinbase. Instead of caving to the ransom demand, the exchange is cooperating with law enforcement and offering a $20m reward for information leading to the culprits. This proactive approach aims to combat criminal activities, reinforce security measures, and support affected customers.

The incident highlights ongoing security challenges in the cryptocurrency industry, with recent high-profile breaches like Bybit’s $1.5bn token theft underscoring the need for robust defenses. The disclosure of the attack on Coinbase came just before its anticipated inclusion in the S&P 500 index, a significant milestone for the crypto sector. Overall, the cryptocurrency market continues to face significant risks, with $2.2bn stolen through platform hacks in 2024 alone, as reported by Chainalysis.