Coinbase data leak endangers users’ safety, warns TechCrunch founder

The founder of TechCrunch, Michael Arrington, warned that a data breach at Coinbase could pose real-world threats to users’ safety.

A recent hack on Coinbase exposed sensitive data, including home addresses, causing people to scrutinize user security more closely.

Following the security incident, Coinbase disclosed that fewer than 1% of its transacting monthly users experienced compromise, and potential reimbursement costs could reach nearly $400 million.

While financial losses concern many, Michael Arrington, founder of TechCrunch and Arrington Capital, believes the true cost to users may lie in the human consequences.

“Very disappointed in Coinbase right now. Using the cheapest option for customer service has its price,” Arrington said in a May 20 X post, adding:

“Something that has to be said though – this hack – which includes home addresses and account balances – will lead to people dying. It probably has already.”

Although attackers did not expose sensitive user data and funds, bribed offshore support agents reportedly enabled attackers to access internal systems.

This access allowed criminals to collect user details that they may later leverage in scams involving psychological manipulation or threats of physical harm.

Criminals are targeting crypto holders as Bitcoin’s price exceeds $100,000, turning digital wealth into a key target.

Multiple reports have emerged showing that criminals rob crypto investors, with some resorting to kidnapping or torture to force transfers of digital assets.

In May, attackers kidnapped a man to force his crypto-millionaire son to pay a ransom. Police arrested seven people after they raided a location to free the man.

To safeguard user data and prevent breaches, Ronghui Gu, co-founder of CertiK, recommends that crypto platforms employ a layered defense strategy.

“This can include privileged access management, zero trust architecture, multifactor authentication across internal systems, and continuous monitoring with behavioral analytics,” Gu said adding:

“Preventive measures such as regular phishing simulations, tailored security training, and restricting third-party access to sensitive systems may help reduce these risks.”

CertiK reported that phishing attacks caused the highest financial damage to the cryptocurrency industry in 2024, with attackers stealing over $1 billion through 296 separate incidents.

Of the 296 phishing attacks in 2024, three resulted in losses greater than $100 million, highlighting how significantly these scams impact the industry.