Coinbase Projects Up to $400 Million Loss After Cybersecurity Breach, Stock Tumbles Over 2%

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Security Incident Sends Coinbase Stock Reeling

Coinbase (NASDAQ:COIN) has disclosed that it expects to suffer a loss from $180 million to $400 million in the wake of a cyberattack that compromised the account data of less than of its user base. The announcement drove the crypto platform’s shares down 2.15% during pre-market trading on Thursday. The stock hit $257.75, a notable decline from Wednesday’s $263.41.

Coinbase’s disclosure about the incident follows a recent announcement about the company’s upcoming inclusion in the S&P 500 index. It also underscores persistent security risks across the broader crypto industry, as this year also saw crypto exchange Bybit lose approximately $1.5 billion in digital tokens due to a hack.

Details Emerge on Method and Scope of the Attack

According to the company, an unidentified threat actor told Coinbase via email that they were in possession of sensitive information relating to the accounts of some clients and internal Coinbase documents. The attacker managed to extract some personal data, but Coinbase has confirmed that no login credentials or passwords were compromised during the breach.

In response to the attack, Coinbase announced it will compensate users who transfer funds to the malicious party due to deception. The breach occurred through insiders, the perpetrators paid several non-US contractors and support personnel to obtain data from the company’s internal systems. Those employees have been fired.

The attacker demanded a $20 million ransom, which Coinbase declined to pay. Instead, the company has offered a $20 million bounty in exchange for actionable intelligence leading to the attackers.