Coinbase Hit with Multiple Lawsuits Following User Data Breach
Coinbase is facing mounting legal challenges following a significant data breach that compromised user information. Over the weekend, at least six lawsuits were filed against the prominent cryptocurrency exchange, accusing it of inadequate security measures and poor crisis management. Users are expressing concerns about potential financial risks now that their personal data may be in the hands of cybercriminals. The legal actions were initiated between May 15 and May 16, primarily in New York, with at least one case filed in California.
Coinbase Lawsuit Details
The lawsuits against Coinbase detail serious allegations regarding the company’s failure to protect user data. Plaintiffs claim that the exchange did not provide adequate training for its employees, which contributed to the breach. They argue that Coinbase, one of the largest exchanges globally, lacked robust security protocols, thereby increasing the risk of fraud for its users.
According to reports from the US Public Access to Court Electronic Records (PACER), users have criticized Coinbase for its slow response to the breach. The lawsuits highlight that the exchange did not promptly inform users about the incident or take timely action to mitigate the damage. One lawsuit specifically accuses Coinbase of “unjust enrichment,” suggesting that the company has not invested sufficiently in its internal security systems. As of now, Coinbase has not publicly addressed these lawsuits, although the exchange stated last week that it is cooperating with the SEC and law enforcement to identify the perpetrators.
Coinbase Data Breach
Last week, Coinbase disclosed that malicious actors had gained access to the personal information of “less than one percent” of its users by bribing overseas customer support agents. The breach has reportedly led to some users being defrauded.
Coinbase CEO Brian Armstrong revealed that the attackers contacted the exchange, claiming to possess the stolen data and demanding a ransom of $20 million. Instead of complying with the ransom demand, Coinbase announced it would establish a reward fund of the same amount for information leading to the attackers’ identification. Additionally, the exchange pledged to reimburse users who inadvertently sent funds to the criminals.
In an 8-K filing with the US Securities and Exchange Commission, Coinbase estimated that the costs associated with remediation could range from $180 million to $400 million. The company indicated that the communication from the attackers appears credible, suggesting that the compromised data may still be in their possession. The breach has exposed sensitive information, including names, addresses, emails, masked social security numbers, bank account details, government IDs, and account data of affected users. However, Coinbase has not disclosed the total number of users impacted by the breach.
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