Coinbase Faces Backlash For Allegedly Delaying Recent Data Breach Disclosure

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Coinbase Might Have Taken “Oops” to a Whole New Level

So, it turns out Coinbase, the titan of crypto exchanges, has been sitting on some rather juicy secrets. You know, the kind of secrets that could make your crypto portfolio seem like a fun game of Monopoly.

According to a thrilling report from Reuters (they’re really good at making things sound like the next season of a crime documentary), Coinbase allegedly knew about a massive data breach for *months* before they actually bothered to tell the world. Yes, months! Who knew transparency in the digital age could be so overrated?

The Breach: A Drama Starring Coinbase and an Indian Outsourcing Firm

Let’s set the stage: It’s January. An employee from TaskUs, a contractor based in India, is caught red-handed. Not with a bag of chips, mind you, but with photos of her work computer—no, not for her scrapbook—but to sell them to hackers. Yeah, very professional, right?

At least six people who are apparently “in the know” (aka sources who spoke to Reuters) have spilled the beans about how this employee and her accomplice were happily feeding Coinbase customer information to hackers. What did they get in return? Oh, just a little thing called “bribes”—how charming.

Coinbase, of course, was all like, “Oh, we didn’t know, we only discovered this recently. But we totally fired all the people involved, so no biggie.” They even said they were tightening their controls. That’s like saying you’re going to lock the door after the horse has bolted, but hey, points for effort.

Investors React: ‘Transparency, What’s That?’

So, what did the investors have to say? They weren’t too thrilled, naturally. “Why didn’t you tell us about this months ago?” they cried, clutching their wallets. Some even accused Coinbase of being a bit… frugal with their choice of contractors. “A $60 billion company saving a few bucks on workers,” one social media user remarked, clearly not impressed. “Meanwhile, they’re giving out their richest customers’ home addresses like they’re on a party invitation list.” Ouch.

CEO Brian Armstrong tried to explain, telling everyone that the hackers tried to blackmail the company for $20 million in Bitcoin. Naturally, Coinbase refused to pay, which is probably a good thing considering the company’s track record of transparency, right?

As for the Securities and Exchange Commission (SEC), they’ve been getting into the nitty-gritty, claiming that Coinbase had been aware of contractors accessing data “without a business need.” But of course, they only made the connection between these instances and the breach after the hackers demanded ransom. The plot thickens.

Not surprisingly, Coinbase is now facing a mountain of lawsuits. Investors are particularly vocal, alleging significant losses because of the delayed disclosure. One lawsuit even claims that TaskUs and Coinbase “failed to timely notify” everyone about the breach. So, between January and May, it seems they were playing a fun game of “Let’s Pretend We Didn’t Know Anything.” Classic move.

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2025-06-04 13:15