DOJ Probes Coinbase Data Breach Linked to Insider Bribes
The U.S. Department of Justice has launched an investigation into a major Coinbase data breach believed to involve insider bribery. The case revolves around third-party customer support contractors—allegedly based in India—who may have accepted bribes in exchange for leaking customer information, according to a Fox Business report.
As detailed by Bloomberg on May 19, hackers accessed internal systems through these contractors, exposing personal information from a limited number of user accounts. While passwords, private keys, and digital assets were not compromised, sensitive data like names, email addresses, and partial Social Security numbers were leaked.
The breach reportedly triggered a wave of social engineering attacks, one of which targeted a partner at Sequoia Capital. To make matters worse, the hackers allegedly demanded a $20 million ransom to keep the incident under wraps—a demand Coinbase refused, instead alerting law enforcement and offering a reward for leads.
In a public statement on May 15, Paul Grewal, Coinbase’s Chief Legal Officer, confirmed full cooperation with the DOJ and international authorities. “We support legal action against anyone who violates our trust and jeopardizes user safety,” he said.
Fallout and Lawsuits
Several victims of the breach have now taken legal action. One such victim, a retired artist named Ed Suman, claims to have lost $2 million due to the incident. Loss estimates from the breach currently range between $180 million and $400 million.
Coinbase’s stock experienced volatility following the news. Meanwhile, the U.S. Securities and Exchange Commission (SEC) is reportedly reviewing the company’s reporting practices.
Coinbase Under Pressure
Although Coinbase has not suffered large-scale hacks like those seen at Binance or Bybit, the current situation raises concerns over internal controls and third-party oversight. The breach places Coinbase’s reliance on external customer service providers under scrutiny.
Despite the controversy, Coinbase recently scored a major win—its inclusion in the S&P 500 index—and is rumored to be exploring acquisitions, including Circle, the issuer of the USDC stablecoin, and crypto derivatives exchange Deribit.
As the DOJ investigation unfolds, Coinbase’s response will be closely watched by regulators and the crypto industry alike. The outcome could shape broader discussions about user data security and regulatory compliance in the digital finance sector.
