Coinbase while also addressing ongoing cyber security issues Following a multi-billion dollar hack, Coinbase’s platform remains in serious turmoil. This unexpected development might end up costing the cryptocurrency titan nearly $400 million. The event started on 11th May. Coinbase then began to receive emails from an unidentified threat actor who allegedly wanted $20 million to keep the attack a secret. Coinbase’s share price was down 4.1% in the wake of news about the attack. That drop triggered fear among investors just days ahead of the time when the company is expected to be listed on the S&P 500 index.
Coinbase took a really strong stance by announcing that it was not going to meet the threat actor’s demand. To get there, the company recently announced plans to build a $20 million reward fund. This fund will aid in collecting information that can lead to the arrest and conviction of those responsible for the attack. Coinbase further comforted their customers, vowing to refund any customer who was duped into sending money to the attacker.
“We will reimburse customers who were tricked into sending funds to the attacker,” – Coinbase
Coinbase will continue to be focused on security and building customer trust. They take notice of the financial impact and future liabilities resulting from the accident.
“We’re cooperating closely with law enforcement to pursue the harshest penalties possible and will not pay the $20 million ransom demand we received,” – Coinbase
The consequences of this cyber attack are far greater than the upfront financial losses. In a related filing with the US Securities and Exchange Commission, Coinbase recently underscored its concerns around the costs of remediation and voluntary customer reimbursements. They highlighted losses and indemnification claims, as well as possible recoveries directly related to the incident. Security is still the biggest ongoing concern for the rapidly growing cryptocurrency sector. Nick Jones, the founder of crypto firm Zumo, knows that’s a critical point.
“Security remains a challenge for the crypto industry despite its growing mainstream acceptance,” – Nick Jones
The timing of the attack is particularly concerning as Coinbase prepares to join an elite group of companies in the S&P 500 index. This major milestone is yet another testament to the company’s incredible growth that has seen them make huge strides in the crypto industry. It highlights, unfortunately, the vulnerabilities that continue to plague an industry that is often the first focus of cybercriminals.
Jones underscored the new and emerging hazards in the industry. He continued, “As our young industry expands at a blistering pace, it attracts the attention of malicious actors, who are growing in sophistication in the breadth of their exploits.”
In the wake of this ordeal, Coinbase is doubling down on promises to better inform users of security measures. The company seeks to assure its customers that they’ll never ask for sensitive information. This applies to passwords and two-factor authentication codes.
“To the customers affected, we’re sorry for the worry and inconvenience this incident caused,” – Coinbase