Coinbase says hackers bribed staff to steal customer data, demanding $20M ransom

I have been receiving regular spear phishing calls from these guys, or someone who bought the leaked data, with classic tactics like claiming that I need to confirm a potentially fraudulent transaction. They speak perfect English with an American accent, sound very friendly, and have knowledge of your account balance. Thankfully on the first call I realized it was a scam right away, and Google's call screening feature takes good care of the rest. Wish I could forward them to Kitboga[1].

I guess they didn't have as much luck as they wanted scamming Coinbase's customers, and once they had their fun they decided to try extorting Coinbase themselves.

[1] https://www.youtube.com/watch?v=HNziOoXDBeg

If you had any significant assets on Coinbase at any time prior to this breach, spear phishing is the least of your worries.

Coinbase not only leaked your full name and address, they also gave up your balances, your transaction history, and images of your government identification.

People with "significant" crypto balances are being assaulted on the street and in their own homes, and family members are being kidnapped for ransom.

"Significant" in this case can be $10k or less.

Until now, your best defense secrecy. Never talk about crypto in public in any way that could be traced to your real-world identity.

Thanks to Coinbase that defense is now gone.

The bad guys can see who has ever had a significant balance on Coinbase (even if they don't right now), whether that balance was sold for cash and how much, or if you've ever transferred tokens off the exchange to a self-custody wallet.

Now the bad guys know who's worth kidnapping for ransom and where you live. For most people, a Google search of your name and home address turns up the names of family members who would would also be lucrative targets for kidnapping and threats of violence.

Coinbase will never be forced to reimburse all the damage they've done because the true cost would bankrupt the company.

Why is this such an issue with crypto?

Wealth status is often very well known for public figures and entrepreneurs. People are driving around in $200k cars.

Is it due to the liquidity of cryptocurrencies that $5 wrench attacks work better?

If you're kidnapping a generic very rich person, how are you expecting them to pay the ransom, a big burlap sack of cash? There's a lot that can go wrong there. A bank transfer or other conventional financial instrument? Few criminals would be comfortable with that approach. (John Grisham novels, and 'Archer's beloved bearer bonds, aside, it's virtually impossible to make this untraceable). Magic internet money is presumably far less messy.

Also, a decent proportion of crypto-millionaires came by their riches in... not entirely above-board ways (in particular, securities fraud; all those pump and dump scamcoins are paying off for _someone_), and may be reluctant to involve the authorities. And the crypto industry as a whole is unusually comfortable with extortion; hacked crypto companies paying a kind of bounty to hackers to get the rest of the funds back is a common thing.

They can use their bank account to buy crypto and then pay the ransom. Kidnapping is a thing in latin america before crypto became cool.

“Hey, cryptocurrency exchange, I, a random rich person, would like to, having never interacted with you before, buy a million dollars of bitcoin and transfer it out. Today, please.”

That is simply not going to happen.