Coinbase Had Early Knowledge of Data Breach but Delayed Public Disclosure: Report

Highlights:

• Coinbase knew about the data breach in January but disclosed it months later after receiving a ransom demand.
• A TaskUs employee from India allegedly sold user data belonging to Coinbase.
• The lawsuits claim Coinbase failed to inform investors about the breach and mishandled user information.

According to Reuters, Coinbase discovered in January that the data of its users had been breached. The issue was caused by TaskUs, which is an outsourcing company working with Coinbase. A TaskUs employee working in Indore, India, was reportedly seen taking pictures of her work computer screen on her personal phone. Reports say she and an accomplice sold the captured data to hackers in exchange for bribes. Multiple former employees confirmed they had been informed about the breach by either internal investigators or coworkers who witnessed the act.

🚨 Coinbase data breach: the exchange knew everything since January

A Reuters investigation reveals that Coinbase was aware of the data breach as early as January 2025. Sensitive user information had been compromised through its Indian contractor, TaskUs.

On May 14, TaskUs… pic.twitter.com/u3edmT0e1f

— Atlas21 (@Atlas21_news) June 3, 2025

Although Coinbase received immediate notification, the company disclosed the breach only on May 14 through a filing. The company admitted that close to 70,000 users had their data stolen. The stolen data included customer names, addresses, phone numbers, identity documents, and transaction details. The company disclosed the incident after the hackers demanded $20 million in Bitcoin. The company declined to pay and instead offered a $20 million bounty for leads on those responsible.

Contractor Role in Data Breach Draws Scrutiny

The breach brought attention to Coinbase’s reliance on overseas contractors for sensitive support tasks. TaskUs, a U.S.-based company with offices in 12 countries, confirmed that two employees were dismissed for accessing client data illegally. However, it did not name Coinbase as the client. Due to the data breach, more than 200 TaskUs staff were fired. This mass firing drew media coverage in India and sparked worker protests.

Coinbase explained in their May 14 filing that some of their support contractors accessed private employee information without a clear business purpose during the prior months. The firm said its internal monitoring systems had detected this unauthorized access before the extortion attempt. As a response, Coinbase severed ties with TaskUs staff involved in the breach and ended cooperation with other affected overseas agents.

While the company confirmed that passwords and funds remained secure, hackers obtained sensitive data like masked banking details and customer identity information. The company said hackers paid several contractors to collect data from its internal systems. Coinbase took steps to make support operations more secure and restricted access for accounts.

The company estimated that the breach could result in losses ranging from $180 million to $400 million. While a small number of users were affected, the incident raised discussions about how third-party companies manage user data.

Coinbase Shareholders File Lawsuits After Disclosure

As soon as the data breach was announced, Coinbase’s share price dropped by 7%. However, the fall was only brief because, after being included in the S&P 500 index, the company’s stock rose again. Nevertheless, the event triggered legal actions afterwards. An investor filed a lawsuit in the federal court in Pennsylvania. The suit alleged that Coinbase hid information about possible data breaches and misled its customers.

Another case was filed in Manhattan on May 27. The suit claims that TaskUs did not safeguard the information of Coinbase customers. The lawsuit also mentioned that TaskUs was involved in a breach with Ledger in 2022.