Coinbase has come under scrutiny after confirming a security breach that revealed some of its users’ personal information. Crypto exchanges say less than 1% of monthly trading users are affected.
Still, small slices may mean thousands of people. The attack could eventually bring Coinbase’s repayment to $400 million, according to reports.
But money may not be the biggest problem here. What’s even more disturbing is the leaked information – home address and account balance. Some experts say that such data falls into the wrong hands can put people in real danger.
Stolen information can lead to physical violence
Michael Arrington, founder of TechCrunch and Arrington Capital, did not stop his concerns. On X on May 20, he said that such violations could lead to people’s “death”.
“It may have existed,” he added. His comments were more than just a buzzing view. There was a wave of violent attacks targeting cryptocurrency holders. These are not random thefts, some involve kidnapping and even torture.
I’m a long-term investor, too @coinbase. However, what must be said – this hacker – including home address and account balance – will cause people to die. It may have existed. The cost of humanity at the expense of pain is much greater than $400 million… pic.twitter.com/rusykagh7x
– Michael Arrington 🏴☠️ (@arrington) May 19, 2025
On May 4, the father of a French crypto entrepreneur was kidnapped in Paris. The attacker reportedly cut off one of his fingers and sent a video to his son asking for €5 million in cryptocurrency.
French police finally rescued the victim two days later and arrested five suspects. This happened a few days before Coinbase confirmed its own violation. The connection may be a coincidence, but the trend is real – Rip investors are becoming targets.
Hacker pays off customer service workers
What makes Coinbase violation even more shocking is how it happens. Cybercriminals reportedly bribed contractors who served customers outside the United States.
This gives them a way to get into the internal system without having to crack anything directly. No password or private key was stolen, and no cryptocurrency was taken away, but the criminal took away enough personal data to achieve a serious scam.
These internal work is hard to predict, or even harder to stop. They show how weak some parts of the crypto industry are still in handling user security, especially when it comes to outsourcing.
Experts demand a better layer of security
Ronghui Gu, one of the people behind security firm Certik, said crypto companies do need to strengthen their games. He is talking about things like restricting what to access, using two-factor login, not just believing everything by default.
Most importantly, he believes companies should keep an eye on their systems and make sure employees (especially those who handle private information) actually know how to spot how to spot problems before trouble begins.
But even that might not be enough. GU warns that more attackers are skipping technical defenses and instead hunting people. That’s how social engineering works – train or bribe people into access.
Featured images from Unsplash, charts for TradingView
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