Cryptocurrency platform Coinbase faces potential $400M loss due to data breach as it approaches S&P 500 listing.
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Coinbase is grappling with a data breach that could cost up to a whopping $400 million, just days before its anticipated S&P 500 index debut.
This internal crisis was sparked by shady individuals bribing contractors or employees to breach the company's internal systems and steal sensitive customer data. The hackers demanded a $20 million ransom, threatening to leak the data if their demands weren't met.
Not one to bow down to threats, Coinbase refused to pay the ransom. However, they acknowledged that less than 1% of their monthly active users' data had been compromised. They've also dismissed the contractors involved in the breach from their ranks.
According to an SEC filing, Coinbase intends to reimburse users who have suffered losses as a result of the attack, with the estimated cost ranging between $180 million and $400 million.
Coinbase shares took a nosedive by 7% to $244.44 on Thursday, as concerns over the data breach and a new SEC investigation surfaced. This investigation centers around accusations that Coinbase may have misled investors prior to its 2021 IPO.
Adding salt to the wound, a New York Times report revealed that the SEC is looking into whether Coinbase deliberately deceived investors by inflating its user numbers ahead of its public debut in 2021.
While Coinbase dismissed the SEC probe as a holdover from the previous anti-crypto administration, the regulatory body has taken a close look at the exchange's claim of having 100+ million "verified users" which appeared in its marketing and IPO documentation in 2021. Notably, Coinbase stopped reporting this metric in 2022, an SEC filing indicates.
In other crypto-related news, Tether bought $458 million worth of Bitcoin for Twenty One Capital, Coinbase surged 10% after joining the S&P 500, and there are rumors swirling about Bybit's return to NFTs.
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- The ongoing cybersecurity issue at Coinbase, involving a data breach that could cost up to $400 million, has raised concerns in the finance and business sectors, escalating into a political issue as the SEC investigates potential misleading practices during its 2021 IPO.
- As technology advances, cybersecurity threats such as the one currently facing Coinbase, where hackers demand ransom for stolen sensitive data, are increasingly becoming a general-news topic of interest.
- The recent taken-down SEC filing by Coinbase suggests that they will cover the costs associated with the data breach, which includes reimbursing affected users, marking another significant event in the intersection of crypto and business that is closely monitored in the financial and politics spheres.
