$400M Coinbase Scam: On May 15, Coinbase, the American cryptocurrency exchange, announced a major data breach that affected over 69,000 users and may have cost the company up to $400 million. According to a Fortune report, hackers orchestrated the breach by bribing customer support agents in India to reveal confidential user information, an incident now considered the company’s largest security failure to date.

The report also revealed that a loosely connected group of English-speaking teenage hackers played a central role in the scam. Additionally, Coinbase’s reliance on business process outsourcing (BPO) divisions created vulnerabilities in its security operations.

TaskUs targeted by hackers?

Hackers targeted staff at TaskUs, a U.S.-based customer service firm that has supported Coinbase since 2017. Shortly after the security breach became public, TaskUs, which operates a major hub in India, fired 226 employees in Indore. The company had been paying salaries ranging from $500 to $700 per month.

Due to these low wages, some Indian employees accepted bribes to share private client information. In response, Coinbase severed ties with those individuals and other foreign agents involved in the breach. Sergio Garcia, founder of crypto investigative firm Tracelon, told reporters, “There’s an economic reason for them to accept the bribe, that’s the weakest link in the chain.”

Posing as Coinbase employees:

Hackers impersonated Coinbase employees to trick clients into handing over their cryptocurrency holdings, since they couldn’t access the company’s crypto vaults with stolen data alone. These tactics led to significant financial losses. Although Coinbase hasn’t disclosed the exact number of affected customers, the company plans to compensate those impacted.

Legal action against TaskUs:

A class action lawsuit alleging negligence has been filed against TaskUs in New York on behalf of Coinbase clients. The business insists that there is no truth to any of the charges and that they are strengthening their security measures. According to TaskUs, two agents were part of a larger conspiracy that targeted many Coinbase-affiliated service providers.

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Security Breach Was Caused By:

Researchers believe “The Comm” or “Community”, a loosely connected group of young, English-speaking hackers,  caused the security breach. These individuals communicate primarily through Telegram and Discord. According to the research, the group often seeks attention or the thrill of mischief, and they compete to outdo one another by stealing increasingly large sums.

Furthermore, Josh Cooper-Duckett, director of investigations at Cryptoforensic Investigators, explained to Fortune that many of these hackers come from video gaming communities. “They bring their high scores into the real world,” he said. “And in this world, how much money they steal is their high score.”

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