Coinbase Fires Customer Support Agents Over Alleged Involvement in Social Engineering Attacks

The contracted agents were based in India. According to a May 15 Fortune interview, Coinbase's chief security officer, Philip Martin

Coinbase has reportedly fired a group of customer support agents following their alleged involvement in social engineering attacks on users. The contracted agents were based in India and allegedly allowed scammers to access user data.

According to a May 15 Fortune interview, Coinbase's chief security officer, Philip Martin, said the company flagged customer support contractors who allowed scammers access to user data, suggesting they could be Indian nationals. The CSO’s comments came after some crypto users reeled from attempted phishing attacks using their Coinbase data, which the exchange estimated could cost them between $180 million and $400 million in remediation and reimbursement.

Qiao Wang, a core contributor to Alliance DAO, said in a May 15 X post that he may have been a victim of one of these attacks. He said a scammer notified him his Coinbase account had been compromised, asked him to verify his personal information, to which the criminals likely had access through the compromised agents, and requested he withdraw all his funds to a “Coinbase self-custodial wallet.”

“I called them out at the end of the call telling them had to step up their game ... ,” said Wang on X. “They told me that had made $7m that day.”

Related: $330M Bitcoin social engineering theft victim is elderly US citizen

Cointelegraph reached out to Martin and Coinbase for further comment, but did not receive responses at the time of publication. Following the Securities and Exchange Commission (SEC) disclosure estimating up to $400 million in reimbursements, shares of Coinbase Global dropped more than 5%.

Regulatory concerns amid data breach

Reports of the alleged bribes and user data breach came amid Coinbase CEO Brian Armstrong’s visit to lawmakers in Washington, DC, to support crypto-related legislation. Congress is considering another vote on a stablecoin bill and drafting legislation for a digital asset market structure bill, both of which were crucial policies that could favor the crypto industry.

The New York Times also reported on May 15 that Coinbase is facing an SEC probe over allegedly misstating its user numbers starting in 2021. Though the regulator dropped its enforcement action against Coinbase in March, SEC officials were reportedly continuing to investigate the exchange over its “verified user” numbers.

One of the issues stemmed from an SEC filing stating the exchange recorded 43 million users before its 2021 public filing. Armstrong said Coinbase had 103 million verified users in 2022. Coinbase chief legal officer Paul Grewal reportedly said the matter was a “holdover investigation from the prior administration.”