Coinbase Global Inc. co-founder and CEO Brian Armstrong thanked the Hyderabad police for arresting an ex-Coinbase customer service agent who allegedly led a cyberattack on the company in May this year.
In an X post shared on Friday, December 26, Armstrong said, “We have zero tolerance for bad behaviour and will continue to work with law enforcement to bring bad actors to justice. Thanks to the Hyderabad Police in India, an ex-Coinbase customer service agent was just arrested. Another one down and more still to come.”
The arrest is linked to one of the most high-profile security breaches involving a crypto-based company this year.
Criminals demanded USD 20 million ransom
Hackers allegedly bribed the employees outside the United States to attain sensitive information on customer data and demanded a USD 20 million ransom.
The company stated that the breach could cost it up to USD 40 million, Bloomberg reported.
Upon confirmation of the breach, the company spokesperson also reported that it had filed charges against a Brooklyn man.
In a blog post dated May 15, Coinbase laid out the details of the extortion attempt. The criminals had reportedly targeted their customer support agents overseas, which has now been established as India, and used cash offers to bribe employees to copy data from customer support tools. This primarily affected fewer than 1 per cent of Coinbase’s monthly transacting users.
“Their aim was to gather a customer list they could contact while pretending to be Coinbase—tricking people into handing over their crypto.
“They then tried to extort Coinbase for USD 20 million to cover this up. We said no,” the blog read.
The company stated that it would compensate those affected by the cybercrime, instead of paying the ransom.
“We’re cooperating closely with law enforcement to pursue the harshest penalties possible and will not pay the USD 20 million ransom demand we received,” adding, “Instead, we are establishing a USD 20 million reward fund for information leading to the arrest and conviction of the criminals responsible for this attack.”
The company’s decision to go public with the cyberattack led to a 4.1 per cent fall in its share price.
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