Indian law enforcement agencies have arrested a former Coinbase employee in connection with a data leak affecting 69,461 users and causing $307 million in losses.
Coinbase CEO Brian Armstrong confirmed on Thursday that Indian law enforcement has arrested a former customer service employee in Hyderabad in connection with the massive data leak that was revealed in May. This is the first arrest in a chain of prosecutions that the largest cryptocurrency exchange in the US is pursuing to track down those behind this serious incident.
Armstrong reaffirmed the company's firm stance on the X platform, declaring zero tolerance for wrongdoing and continued close cooperation with authorities to bring perpetrators to justice. He stressed that this was just the first case and that more arrests would follow.
Large-scale criminal network targets subcontractors.
The leak originated in December 2024 when cybercriminals bribed overseas customer service employees to steal sensitive information. The stolen data included the names, addresses, phone numbers, and government-issued identification documents of 69,461 users, according to company records filed with the Maine Attorney General's Office.
Fortune's investigation traced the leak back to employees at TaskUs, a Texas-based business process outsourcing company with operations in India. TaskUs confirmed it discovered two employees allegedly recruited by a large-scale organized crime campaign that targeted not only Coinbase but also numerous other service providers.
When the criminal group demanded a $20 million ransom, Coinbase refused and instead implemented a corresponding reward program for information leading to the arrest. This strategy has begun to yield results with the first arrest in India.
The financial consequences of the incident were significant, with Coinbase reporting $307 million in expenses in its second-quarter report, including remediation and customer reimbursements. The company is now facing a class-action lawsuit from shareholders alleging delays in disclosing information.
The arrest comes a week after the Brooklyn District Attorney's Office indicted Ronald Spektor on 31 charges related to a separate phishing scam conspiracy, stealing $16 million from approximately 100 Coinbase users. The company's stock fell 1.2% to $236.90 on Friday, while Indian law enforcement has yet to issue a public statement on the arrest.
