Coinbase is under scrutiny again, this time not for market fluctuations or regulatory challenges, but due to a significant data breach involving tens of thousands of customers. This breach has been tied to a third-party support vendor from India.

The Inside Job That Set It Off

The incident reportedly started when a support agent from TaskUs, a global outsourcing firm contracted with Coinbase, captured images of internal customer service tools that included sensitive data like user names, email addresses, and potential transaction histories. This information did not remain secret for long, as reports suggest it was shared with unauthorized external parties, possibly for monetary gain.

Major security breach continues to shake Coinbase 🇺🇸! New report reveals the crypto giant knew about a data leak some four months before hackers demanded $20M, exposing sensitive user info. 🚨📉 — Bitcoin.com News (@BTCTN) June 3, 2025

Additionally, investigators believe this leak may have been a coordinated effort involving more than one individual, indicating a serious risk of internal malpractice.

Coinbase Responds to the Fallout

Upon realizing the scale of the breach, Coinbase ended its contract with TaskUs and initiated drastic measures to overhaul its customer support structure, which included ending access for other third-party vendors and investing in a fully US-based support team. The breach has reportedly impacted around 70,000 users, and the perpetrators demanded a ransom of $20 million not to leak or sell the data. Coinbase refused and is cooperating with law enforcement, offering a reward for information on the individuals responsible.

How Bad Is It?

Although there has been no confirmation of actual funds being stolen, the exposure of personal data presents minimal barriers for cybercriminals, making phishing and identity theft more plausible. Internally, Coinbase estimates that the financial ramifications of this incident could reach between $180 million to $400 million.

A Larger Problem for the Crypto Industry

This incident highlights the risks associated with outsourcing, especially for firms requiring consistent customer support. A single bad actor can significantly undermine a company’s reputation, especially for those whose value proposition relies on trust and financial security.

The Takeaway

This breach serves as a reminder that vulnerabilities can arise from within, emphasizing the need for robust internal security protocols that go beyond simply shielding against external cyber threats.