TechCrunch founder Michael Arrington has raised alarm over a recent data breach at Coinbase, warning that it “will lead to people dying.” The breach exposed sensitive customer information including home addresses and account balances. Arrington called for regulators to reconsider the effectiveness of know-your-customer (KYC) policies and demanded jail time for executives who fail to protect user data adequately.
Arrington, a longtime investor in Coinbase, tweeted, “This hack—which includes home addresses and account balances—will lead to people dying. It probably has already. The human cost, denominated in misery, is much larger than the $400 million or so they think it will actually cost the company to reimburse people.”
On Thursday, Coinbase revealed that cybercriminals attempted to extort the company with a $20 million Bitcoin ransom, which Coinbase refused to pay. Instead, Coinbase offered a $20 million reward for information leading to the arrest and conviction of the attackers. The exchange also promised to reimburse customers who fell victim to scams connected to the breach.
A Coinbase spokesperson told Decrypt, “We understand that some customers and industry participants are feeling concerned following news of the incident. We take these concerns seriously and are actively coordinating with law enforcement to track the criminals responsible. If you believe you are being personally targeted or threatened, please contact local law enforcement immediately.”
The U.S. Justice Department has opened an investigation into the breach, though Coinbase clarified that it is not the subject of the probe but is cooperating fully.
Despite these measures, Arrington insists the danger is immediate. The breach revealed names, phone numbers, emails, government ID images, and more, putting users at serious risk. He criticized current regulations and corporate practices, arguing that lax enforcement and profit motives contribute to such breaches.
Arrington highlighted the growing wave of kidnappings targeting high-net-worth crypto holders. Recent incidents include the abduction of Ledger co-founder David Balland in France, where kidnappers mutilated his hand, and a home invasion targeting streamer Kaitlyn “Amouranth” Siragusa, who defended herself and caused attackers to flee.
Additionally, the father of a crypto millionaire suffered a finger amputation during a kidnapping, while an attempted abduction of a crypto industry leader’s relatives was foiled by authorities.
Arrington argues that current KYC laws force companies to collect sensitive data they’d prefer not to hold, increasing risks to users. Former Coinbase CTO Balaji Srinivasan echoed this, stating regulators compel companies to collect KYC data, placing the blame on state regulations rather than executives.
Arrington responded, “When enough people die, the laws may change,” highlighting the urgent need for regulatory reform.
