Crypto firm Coinbase hacked, faces SEC scrutiny

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Crypto firm Coinbase hacked, faces SEC scrutiny
The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
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Coinbase may have to spend $180 million to $400 million to reimburse customers
(Image credit: Ahmet Serdar Eser / Anadolu via Getty Images)
Rafi Schwartz, The Week US
16 May 2025
What happened
Coinbase, the largest U.S.-based cryptocurrency exchange, said Thursday that cybercriminals had hacked the company, stealing sensitive user data for a scheme to rob customers of crypto assets and extort the company.
The Securities and Exchange Commission is also investigating Coinbase for allegedly overstating its active users in securities filings, The New York Times reported Thursday.
Who said what
Coinbase said in an SEC filing that an undisclosed number of user names, addresses and government ID images were stolen by someone paying multiple now-fired "contractors or employees working in support roles outside the United States." It estimated it would have to spend $180 million to $400 million to fix the situation and reimburse customers.
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The stolen data allowed the hacker to "conduct social engineering attacks" on users to "try to trick them into sending their funds," CEO Brian Armstrong said. Coinbase said the hackers had demanded $20 million in bitcoin to not release the user data, but the company instead would offer that same amount for information about the criminals. "We will prosecute you and bring you to justice," Armstrong said. "You have my answer."
The ongoing SEC investigation is a rare crypto-linked case that "began during the Biden administration and has continued" under President Donald Trump, the Times said. Since Trump took office, "the SEC has dropped more than a dozen lawsuits and investigations targeting crypto firms," including a separate 2023 case against Coinbase, and "largely disbanded its specialized crypto unit."
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Rafi Schwartz, The Week US
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Rafi Schwartz has worked as a politics writer at The Week since 2022, where he covers elections, Congress and the White House. He was previously a contributing writer with Mic focusing largely on politics, a senior writer with Splinter News, a staff writer for Fusion's news lab, and the managing editor of Heeb Magazine, a Jewish life and culture publication. Rafi's work has appeared in Rolling Stone, GOOD and The Forward, among others.
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