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US cryptocurrency exchange Coinbase has been targeted by hackers who stole customer data and demanded $20mn to prevent its public disclosure, the company said on Thursday.
The group, which next Monday is set to become the first crypto exchange to join the S&P 500, said the cyber demands were made on Monday.
The company’s shares were down 5.4 per cent in morning trade in New York. They had soared by a quarter on Tuesday after the announcement of its inclusion in the US blue-chip stock index.
“Their aim was to gather a customer list they could contact while pretending to be Coinbase — tricking people into handing over their crypto. They then tried to extort Coinbase for $20mn to cover this up. We said no,” the group said in a statement on its website.
The California-based group has promised to pay a $20mn reward — the amount demanded — for information leading to the arrest and conviction of the criminals responsible.
Cyber criminals have frequently launched attacks on the cryptocurrency industry, searching for weaknesses in poorly written code as well as targeting executives in the sector.
This year hackers stole about $1.5bn in crypto tokens from Bybit, in a heist the digital asset exchange described as the biggest theft to hit the industry.
Chainalysis, the blockchain data group, estimated that hacks on crypto exchanges climbed 21 per cent last year to more than $2.2bn, with most of the activity centred on the Asia-Pacific region. Hackers linked to the North Korean government stole $1.3bn of that total, it found.
It also comes amid a spate of hacks on high-profile companies around the world. Luxury French fashion house Dior, UK department store Harrods and retailer Marks and Spencer have been hit by cyber attacks in recent weeks.
Coinbase said criminals had “bribed and recruited” support agents working outside the US to steal its customer data. Staff involved in the scandal had been fired immediately.
The stolen data accounted for a “small subset” of customers, it added, and included partial social security, bank account details, account data and identity images such as passports and driving licences. However, they did not secure passwords, keys or funds from accounts.
Coinbase said it would reimburse customers who were tricked into sending funds to the attackers, which could be in the range of $180mn to $400mn.
The industry has undergone a revival since US President Donald Trump’s election victory. Bitcoin has climbed by a third in the past month to more than $100,000, its highest level since January.
Dovile Silenskyte, director of digital assets research at WisdomTree, described Coinbase’s inclusion in the S&P 500 as “more than symbolic” because it would help push some of the trillions of dollars in funds that track the benchmark into the stock.
“Crypto is no longer a volatile sideshow. It is being hard-wired into the financial system’s core architecture,” she said.