Former Coinbase Support Agent in India Arrested in Crypto Exchange Hack Probe

Another day, another crypto security incident makes headlines—this time with a human element at its core.

The Insider Threat

Authorities in India have taken a former Coinbase customer support agent into custody. The arrest is part of an ongoing investigation into a hack targeting the major cryptocurrency exchange. Details remain scarce, but the move signals law enforcement is tracing the attack vector back to potential internal vulnerabilities.

It’s a stark reminder that the most sophisticated blockchain security can still be undone by a single point of human failure—or malice. Exchanges build fortresses, but they still need people to guard the gates.

Trust, But Verify (Your Employees)

The case throws a harsh spotlight on the operational risks centralized platforms face. Customer support agents, while essential, often have access to sensitive user data and system backdoors that can be exploited. This probe suggests investigators believe the breach may have originated from an abuse of that privileged access.

For an industry that sells itself on ‘trustless’ technology, it’s ironic how often the old-fashioned problems of trust and insider fraud keep cropping up—almost like the finance sector’s bad habits are hardcoded into the system.

The probe continues, and the crypto world watches. One arrest won’t solve systemic security challenges, but it does send a message: the human firewall needs constant maintenance, too.

Coinbase says access was shut down quickly

The breach was so wide that it allowed attackers near-instant access to customer accounts for months. This type of social engineering attack has become a growing problem in the crypto world. It’s simple: pay someone on the inside.

Philip denied that the hackers had full access the entire time. He said in an interview with Bloomberg News that once the company discovered staff were leaking data, their access was immediately revoked. “They did not have persistent access over the course of the entire period,” he claimed.

The arrest was announced on X by Coinbase CEO Brian Armstrong, who wrote: “We have zero tolerance for bad behavior and will continue to work with law enforcement to bring bad actors to justice. Thanks to the Hyderabad Police in India, an ex-Coinbase customer service agent was just arrested. Another one down and more still to come.”

Not everyone clapped. One user replied under Brian’s post: “lol why you acting like this is a win. You hired them in the first place.”

Coinbase faces rising costs and deeper scrutiny

Coinbase is still digging out of the mess.The cost of repairing damage and reimbursing affected users could be as high as $400 million, putting it among the top ten biggest crypto hacks ever, according to Elliptic.

In February, Bybit suffered a similar attack that cost them $1.5 billion, and in total, $2.2 billion was lost to crypto hacks in 2024, per Chainalysis data.

A Coinbase spokesperson confirmed the India arrest and said it followed the firm’s work with the Brooklyn District Attorney’s Office, where charges were recently filed against a Brooklyn man accused of running “a long-running impersonation scheme targeting Coinbase customers.”

Meanwhile, Coinbase shares slipped 1.2% to $236.79 on Friday, and are now down about 4.6% in 2025.

Despite the chaos, Coinbase still holds most of the $122 billion in spot-Bitcoin ETF tokens, and remains a major political player. It’s become the largest crypto donor in U.S. politics, pouring over $52 million into campaigns during the 2024 cycle.

The crypto industry overall made up half of the nearly $250 million in corporate political donations, with Coinbase leading the pack, according to watchdog group Public Citizen and data from OpenSecrets.

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