The shares of cryptocurrency exchange Coinbase have plunged by more than 6% after the company disclosed a hack earlier today in an 8-K filing.
As reported by U.Today, Coinbase has revealed that its internal documents and customer account data had been stolen by threat actors.
They demanded that the exchange shell out $20 million in order to sweep the damning security incident under the rug. However, Coinbase refused to pay the extortionists, choosing to disclose the security incident.
The data was stolen with the help of rogue overseas employees who had access to the exchange’s data.
Coinbase CSO Philip Martin told Fortune that the compromised India-based support engines had been fired.
The leak affected less than 1% of the exchange’s monthly transacting users. The hackers got their hands on IDs, Social Security records, phone numbers, and some other data. Coinbase has stressed that such sensitive information as private keys or passwords has not been stolen by the bad actors.
Backlash against Coinbase
Adam Cochran, a partner at Cinneamhain Ventures, has slammed the exchange for mismanaging the user’s private data. He has stressed that government IDs and other sensitive data should not be accessible to rank-and-file customer support agents.
“I don’t want to hear about what Coinbase is doing to recover funds – I want to hear what they are doing to better deal with private data,” Cochran said.
Trader Bob Loukas has also stressed that the mislanding of customer data is unacceptable, adding that the company was eventually forced to feign transparency.
Many have also opined that the Coinbase hack strengthens the case for decentralized exchanges.
The incident comes just a few days after Coinbase became the first cryptocurrency company to join the widely tracked S&P 500 index.
