India Arrests Former Coinbase Support Agent For Data Breach: Armstrong
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Indian authorities have arrested a former Coinbase customer service agent in Hyderabad in connection with the crypto exchange's data breach that was disclosed earlier this year, Coinbase CEO Brian Armstrong said.
Key Takeaways:
A former Coinbase support agent has been arrested over a data breach that affected nearly 70,000 users in India.
Coinbase rejected the $20M ransom and spent $307M in breach-related costs.
The incident adds to the growing legal and security pressure on the exchange.
“We have zero tolerance for bad behavior and will continue to work with law enforcement to bring bad actors to justice,” Armstrong said in a post on X on Thursday. “Another down and still to come.”
The breach, which Coinbase said began in December 2024, stemmed from a bribery scheme targeting offshore customer support staff.
The data of nearly 70,000 users was exposed to the Coinbase breach
Cybercriminals allegedly pay customer service agents to gain access to internal systems and extract sensitive user information, including names, addresses, phone numbers and government-issued identification.
Coinbase said in a filing with the Maine Attorney General's Office that 69,461 users were affected.
The attackers later demanded a ransom of 20 million dollars, which Coinbase refused to pay. Instead, the company has launched a related bounty program, offering rewards for information leading to arrests and asset recovery.
A subsequent Fortune investigation linked the incident to customer support agents working for TaskUs, a Texas-based business processing company with operations in India.
TaskUs said it has identified two employees who were allegedly recruited as part of a broader criminal campaign that targeted other service providers supporting Coinbase.
Coinbase reported $307 million in breach-related expenses in its second quarter earnings, covering remediation efforts and compensation for affected customers.
The company is facing a shareholder class action lawsuit alleging Coinbase failed to timely disclose the breach.
The arrest in India comes just days after US prosecutors charged a Brooklyn man with running a separate phishing scheme that allegedly defrauded 100 Coinbase users of $16 million.
Blockchain detective ZachXBT played a role in identifying the suspect.
Shares of Coinbase slipped 1.2% to $236.90 on Friday. Indian law enforcement has not released an official statement about the arrest.
Brooklyn man targets Coinbase users in $16M crypto scam
US prosecutors have reportedly charged 23-year-old Brooklyn resident Ronald Spector with a phishing and social engineering scheme that stole nearly $16 million in cryptocurrency from 100 Coinbase users.
According to the Brooklyn District Attorney's Office, Spektor posed as an employee of Coinbase and contacted victims, telling them their money was in immediate danger and pressuring them to transfer the crypto he controlled to wallets.
Officials said the plan was based on terror tactics rather than technical hacks. Spektor, who operates under the online alias “lolimfeelingevil,” warned victims of recent thefts to avoid suspicion and make quick decisions.
Once funds were transferred, prosecutors said, he tried to hide their source by funneling the assets through crypto mixers, token swaps and online gambling platforms.
Following a year-long investigation, Spector was indicted on 31 counts, including first-degree grand larceny and money laundering.
Law enforcement has so far seized approximately $105,000 in cash and $400,000 in digital assets, and efforts are underway to recover additional funds.
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