Coinbase Faces DOJ Investigation After Launching a Probe into Its Recent Data Breach

The U.S. Department of Justice (DOJ) has launched an investigation into a recent data breach at Coinbase, one of the largest cryptocurrency exchanges in the world.

The U.S. Department of Justice (DOJ) has launched an investigation into a recent data breach at Coinbase (NASDAQ:COIN), one of the largest cryptocurrency exchanges, reports Bloomberg.

According to the report, the department in charge of the probe is the criminal division of the DOJ, based in Washington. DOJ experts are working to establish what happened leading to the breach and who was involved.

Earlier this year, a group of cybercriminals was able to infiltrate Coinbase. Reports say these attackers bribed certain employees and contractors in India in order to obtain personal information from the company’s customers. This type of attack is known as social engineering because it focuses on tricking people instead of computer systems.

Following the attack, the criminals went on to demand a payment of $20 million from Coinbase. Threatening to make the data public, the criminals are said to have used a ransomware strategy to extort funds from the exchange.

However, Coinbase ultimately declined payment and is now dealing with the fallout. According to a recent statement by the company, it is budgeting between $180 million and $400 million for the year to fix the problem. This will include repairing systems and reimbursing customers who were affected.

Compared to other exchanges, Coinbase has been largely immune to most problems. It is one of the last key players in the crypto world to be hit by a major cyberattack.

Additionally, similar attacks were recently targeted at other major exchanges like Binance and Kraken. However, no customer data was stolen at Binance or Kraken as they were able to stop the breaches before they could happen.

To prevent the breaches, Binance had an automated machine learning system in place while Kraken had a team on call 24/7 to respond to any illegitimate activity. Both systems detected suspicious activity and were able to intervene quickly.

This is in stark contrast to the Coinbase event which shows that social engineering is a rapidly growing threat. As hackers are becoming more adept at tricking people, they are pivoting their tactics and focusing less on breaking into computer systems. This means that businesses must work harder to train their staff and install robust security systems.

The incident at Coinbase shows that people are still the weakest link when it comes to cybersecurity. It also highlights the need for companies to take extra care when working with external contractors in various parts of the world. If the proper controls are not in place, allowing external users to have access can create more avenues for risk.

As the investigation by the DOJ continues, Coinbase may face increasing pressure to improve the security measures used to protect its platform.

However, both Binance and Kraken are being praised for their response to the same challenges. Their positive results show that having a strong plan for security and the ability to act quickly is essential for a business to be able to recover from a serious incident.