Coinbase faces a $400M loss after a cyber-attack compromised customer data; the firm refuses ransom and vows to reimburse victims.

Coinbase, one of the largest cryptocurrency companies in the world, estimates that a recent cyberattack would cost it up to $400 million. According to the company, hackers contacted it and said they had access to client data that they had acquired by paying Coinbase workers and contractors.

Less than 1% of Coinbase's user data was compromised, the company said in a blog post, and the crooks exploited this information to pose as the company and trick people into giving over their cryptocurrency. The group then asked Coinbase for $20 million to silence it, but Coinbase declined and instead promised to reimburse all scam victims.

The disclosure caused a 4.1% decline in the company's share price. A significant milestone for the bitcoin sector, the US Company’s inclusion in the S&P 500 index, was just days away when the cyberattack occurred. It also shows how cybercriminals have turned their attention to the sector.

According to Nick Jones, CEO of the cryptocurrency company Zumo, security is still a problem for the sector despite its increasing popularity. Bad actors are drawn to a fledgling business because of its rapid growth, and their attacks are getting more complex.

Coinbase warned its users to remain alert and to anticipate more fraudster efforts in the future. Coinbase claims that it will never ask for a customer's 2FA codes, password, or consent before transferring money to a new or different wallet, vault, address, or account.