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The May 2025 Coinbase data breach has taken a new turn with the arrest of a former support contractor in India.
Author: Sahil Thakur
Published On: Sat, 27 Dec 2025 02:50:45 GMT
27th December 2025 – A major data breach at Coinbase has taken a new turn with the arrest of a former support contractor in India. The breach, which took place in May 2025, has become one of the most expensive and complex security incidents in the crypto industry.
Coinbase CEO Brian Armstrong announced that Hyderabad Police had arrested a former customer service agent. This individual was allegedly involved in a scheme where hackers bribed support staff outside the United States to access sensitive customer information.
The hackers used the stolen data to demand a $20 million ransom from Coinbase. The exchange revealed that the breach could eventually cost up to $400 million to resolve. This makes it one of the most damaging cyberattacks ever faced by a crypto firm.
Coinbase confirmed that the arrest followed close cooperation with U.S. authorities, including the Brooklyn District Attorney’s Office. As part of the same investigation, prosecutors also charged a Brooklyn resident who ran an impersonation scam targeting Coinbase customers using data from the breach.
Armstrong said the company would continue to pursue legal action and cooperate with international law enforcement. He also noted that additional arrests could follow as investigations continue.
The breach exposed a critical weakness in crypto security: support channels handled by third-party contractors. While exchanges have strengthened their technical defenses, hackers increasingly use and bribery to bypass those protections.
By targeting human staff rather than systems, attackers accessed customer information without triggering standard cybersecurity alerts. Coinbase’s experience highlights the need for tighter controls over personnel and outsourcing arrangements.
Coinbase stock declined 1.2% to close at $236.79 on Friday. Although the market response was muted, the incident has added to investor concerns about the company’s operational risks. Coinbase shares are down about 4.6% since the start of the year.
Investors appear cautious rather than panicked. However, the case reminds the industry that trust depends not only on code and infrastructure, but also on how companies manage their human networks.
As Coinbase continues to work with authorities, the company has emphasized that safeguarding customer data remains a top priority. The incident has pushed the exchange to review its internal processes and tighten oversight of contractors and employees.
With the investigation still active, Coinbase has promised to share further updates. Meanwhile, the case serves as a warning to other platforms: even a single breach involving human error or misconduct can trigger widespread consequences.
Real voices. Real reactions.
@brian_armstrong Maybe spend extra money and hire Americans to service Americans moving forward. Customer service is incredibly important, especially when money is involved.
@brian_armstrong Congratulations! 🎉 👇 In Spain we also need help (not with insiders). We are sending many messages to Coinbase in order to block accounts holding stolen funds. We need faster and more effective courses of action, especially measures that truly help users recover their money.🥴
@brian_armstrong super bullish on founders who take these things seriously
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