The unfolding of Coinbase’s data breach probe in India took a new turn over the weekend after an employee was arrested in connection with the case. A senior official from Coinbase’s India unit told Coin Headlines, that at least two more arrests are expected to be made in the coming days.
“One person has been arrested and another one will also soon be nabbed. A total of two to three people are expected to be arrested in links to the case. The situation will not have an impact on Coinbase’s outlook or business operations in India,” the company official told Coin Headlines on the condition of anonymity.
Coinbase CEO Brian Armstrong had thanked the Hyderabad Police for having arrested a former Coinbase customer-service agent. The arrested individual allegedly exposed sensitive user information with third parties in exchange for bribes.
The case was first disclosed by Coinbase in May this year when Armstrong had revealed that the threat actors who had obtained the user information were trying to extort $20 million from the exchange – which was strongly denied by the U.S.-based exchange.
A group of Coinbase-hired customer agents in India were identified to have been involved in the data leak of an estimate of around 70,000 users. At the time, Coinbase had also revealed that the hackers had used the obtained details to scam its users through social engineering attacks – promising to reimburse impacted users.
For now, it remains unclear who were the hackers bribing Coinbase employees. Details on the future course of the legal proceedings against the arrested individuals also remain awaited for now.
In an 8-K filing with the US SEC in May, the exchange had said that the remediation expenses could cost it anywhere between $180 million (roughly Rs. 1,541 crore) and $400 million (roughly Rs. 3,426 crore). Between Q2 and Q3 this year – the company did clock $355 million in costs linked to the data breach incident in India.
Coinbase has recently returned to India after having secured its registration from the Financial Intelligence Unit (FIU) to legitimise its operations in the world’s most populated nation. It also recently invested in India’s CoinDCX exchange to acquire a minority stake.