Newsletter: Coinbase’s substantial data breach coincides with a convenient terms of service update, while the GENIUS Act stablecoin bill regains momentum in the Senate
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Coinbase has disclosed a substantial customer data breach, blaming it on “rogue overseas support agents”. This follows months of crypto security researchers warning about apparent security issues at the company.
According to Coinbase, the data thieves bribed members of Coinbase’s support team, which is based overseas and reportedly makes very little money. It seems Coinbase has been aware of a breach for several months, but only reported it on May 14.
At least five lawsuits have been filed about the breach in the days since, but a change to Coinbase’s customer agreement that went into effect on May 15 may make it more challenging for customers to obtain relief.
![Coinbase
On May 12, Coinbase announced it will join the S&P 500 as its “first and only crypto company”.1a This is the latest change that may see more American investors inadvertently exposed to the cryptocurrency industry via index funds, following MicroStrategy’s entry into the NASDAQ-100 in December 2024 [I72].
Their joy was likely tempered when, only two days later on May 14, they had to announce a data breach that exposed customer data including names, addresses, phone numbers, email addresses, images of government ID documents, account balance and transaction data, and masked social security and bank account numbers. Although leaks like this typically lead to an uptick in phishing attempts, where scammers use the private information to contact customers and more convincingly impersonate Coinbase employees, the leak of account balance data and customer addresses is also particularly concerning given the recent spike in violent attacks and kidnappings targeting wealthy crypto holders.
Crypto security researchers have been warning for months about Coinbase’s evidently poor security practices and lack of attention to customer complaints, and describing hacks in which victims reported being scammed by attackers who seemed to have access to private Coinbase data [I76]. In February, zachxbt wrote: “Coinbase needs to urgently make changes as more and more users are being scammed for tens of millions every month. ... Coinbase is in a position where they have the power to make](/proxy/post_attachment/500261/f8519d6c7c.png "Coinbase
On May 12, Coinbase announced it will join the S&P 500 as its “first and only crypto company”.1a This is the latest change that may see more American investors inadvertently exposed to the cryptocurrency industry via index funds, following MicroStrategy’s entry into the NASDAQ-100 in December 2024 [I72].
Their joy was likely tempered when, only two days later on May 14, they had to announce a data breach that exposed customer data including names, addresses, phone numbers, email addresses, images of government ID documents, account balance and transaction data, and masked social security and bank account numbers. Although leaks like this typically lead to an uptick in phishing attempts, where scammers use the private information to contact customers and more convincingly impersonate Coinbase employees, the leak of account balance data and customer addresses is also particularly concerning given the recent spike in violent attacks and kidnappings targeting wealthy crypto holders.
Crypto security researchers have been warning for months about Coinbase’s evidently poor security practices and lack of attention to customer complaints, and describing hacks in which victims reported being scammed by attackers who seemed to have access to private Coinbase data [I76]. In February, zachxbt wrote: “Coinbase needs to urgently make changes as more and more users are being scammed for tens of millions every month. ... Coinbase is in a position where they have the power to make")
Coinbase CEO Brian Armstrong has characterized my reporting on the timing of the user agreement update as a “conspiracy theory”. He did not comment on the substantive new hurdles introduced by the change, nor a question about the long delay in disclosing the breach.
lb: lol. perhaps even lmao. :)
Gosh it's almost like al lthis "web 3" bullshit is based on exploitation, crime and snake oil, SURPRISING NOBODY but rubes.
@molly0xfff Can't help imagining that "rogue overseas support agents" is codespeak for "North Koreans" (disclaimer: I have *strictly no idea* if North Korea is, or is not, involved).
@molly0xfff Surely by now there is an aphorism similar to "Godwin's Law" for cryptocurrency companies and their adherents.
@molly0xfff the reviews are in
In the Senate, the GENIUS Act has advanced and will likely go to a full vote this week. Although Democrats are likely to insist on a vote on an amendment to limit Trump’s crypto corruption, it’s a symbolic gesture.
![In government
The GENIUS Act stablecoin bill has already advanced in the Senate, after all Democrats and several Republicans voted against it less than two weeks ago amid concerns about Trump’s serious crypto conflicts of interest [I83]. Some Democrats tried to insist that any stablecoin bill include explicit prohibitions preventing the president, Congress members, and others in government from creating and selling digital assets; others, such as the bill’s co-sponsor and longtime crypto industry ally Kirsten Gillibrand, argued that Trump’s crypto activities are “already illegal” and that the bill shouldn’t “deal with all of President Trump’s ethics problems”.20
Despite little in the way of acquiescence to Democrats’ requested changes, 16 Democrats voted in support of the cloture motion: Alsobrooks (MD), Blunt Rochester (DE), Booker (NJ), Cortez Masto (NV), Fetterman (PA), Gallego (AZ), Gillibrand (NY), Hassan (NH), Heinrich (NM), Lujan (NM), Ossoff (GA), Padilla (CA), Rosen (NV), Schiff (CA), Slotkin (MI), Warner (VA).21 The bill will now go to a full vote, likely this week, and will likely still pass after a symbolic but unsuccessful vote on an amendment to limit Trump’s crypto involvement.
The breakneck pace of this bill is likely due to the crypto industry’s concern that their influence on Congress might diminish after the midterm elections. “We have a very narrow window to get legislation through. The midterms are next year. I think it’s very](/proxy/post_attachment/500267/a0604bd063.png "In government
The GENIUS Act stablecoin bill has already advanced in the Senate, after all Democrats and several Republicans voted against it less than two weeks ago amid concerns about Trump’s serious crypto conflicts of interest [I83]. Some Democrats tried to insist that any stablecoin bill include explicit prohibitions preventing the president, Congress members, and others in government from creating and selling digital assets; others, such as the bill’s co-sponsor and longtime crypto industry ally Kirsten Gillibrand, argued that Trump’s crypto activities are “already illegal” and that the bill shouldn’t “deal with all of President Trump’s ethics problems”.20
Despite little in the way of acquiescence to Democrats’ requested changes, 16 Democrats voted in support of the cloture motion: Alsobrooks (MD), Blunt Rochester (DE), Booker (NJ), Cortez Masto (NV), Fetterman (PA), Gallego (AZ), Gillibrand (NY), Hassan (NH), Heinrich (NM), Lujan (NM), Ossoff (GA), Padilla (CA), Rosen (NV), Schiff (CA), Slotkin (MI), Warner (VA).21 The bill will now go to a full vote, likely this week, and will likely still pass after a symbolic but unsuccessful vote on an amendment to limit Trump’s crypto involvement.
The breakneck pace of this bill is likely due to the crypto industry’s concern that their influence on Congress might diminish after the midterm elections. “We have a very narrow window to get legislation through. The midterms are next year. I think it’s very")
@molly0xfff It may be a conspiracy theory, but conspiracy theories are not always incorrect.
@molly0xfff Well this explains why I am suddenly getting crap texts from someone being or pretending to be at Coinbase. I don't deal in crypto and probably never will.
@molly0xfff Possible correction: I think he’s saying they were notifying about the user agreement change in April, not the breach.
@molly0xfff I enjoyed the timing of this email, in the context of this discussion
Trump’s exclusive dinner for holders of the TRUMP memecoin is scheduled for Thursday night. Nearly 3/4 of the wallets on the leaderboard likely belong to non-US buyers, including Justin Sun, whose legal troubles in the US have vanished following his Trump contributions.
A small company called GD Culture Group has announced it will somehow purchase up to $300M in TRUMP tokens. As a company that primarily does business on TikTok, they have a strong incentive to try to influence Trump as he navigates the ongoing saga around a TikTok ban.
Headline on this is a big shocker (/s):
https://www.theguardian.com/us-news/2025/may/22/trump-crypto-sweepstakes-dinner
Trump crypto adviser David Bailey is following in the footsteps of sons of both Trump and Commerce Secretary Howard Lutnick, who are in the MicroStrategy-esque process of creating companies, rapidly going public, and acquiring large bitcoin holdings to become bitcoin proxy bets.
@molly0xfff your definition of “small” is a bit off I would say - a company that can splurge 300M usd on a single bribe is pretty big 🤯
@jospoortvliet that’s the thing -- it’s a small company that somehow found itself with $300M
@molly0xfff oh wow the insanity. So they are a front to some person or organization that wants to buy trump to do something. Must look real bad if you want to hide it - the trump kleptocrats have been extremely open about their profiteering.
Wonder if that’s a strategy to make sure everyone is in so deep they will fight democratic accountability within an inch of their life as they know they all would get jailed…
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