Last week, the company said it had received an email on May 11 from an unknown malicious party claiming to have information about certain customer accounts and internal documents. The cryptocurrency exchange revealed in a filing that the cyberattack could cost it between $180m and $400m in repair costs and voluntary refunds to customers.

While the hackers gained access to some customer data, they did not obtain any passwords or login credentials.

Coinbase has identified the likely source of the breach: customer service agents based in India allegedly accepted bribes to allow criminals to access sensitive information. The hackers even attempted to blackmail the company, demanding $20m not to disclose the leak. Coinbase rejected the demand and, instead of paying, created a $20m reward fund to encourage anyone with information leading to the arrest of those responsible.

The company alerted the US Department of Justice, which quickly opened an investigation. Investigators from the criminal division will be handling the case.

This attack is not the first for Coinbase, which is regularly criticized for its protection of personal data in a sector that is particularly targeted by malicious attacks.

Circle between IPO, Ripple and Coinbase

Circle, issuer of the USD Coin stablecoin, filed for an IPO on April 1, aiming to finalize the process before the end of the month. However, the company tempered its ambitions on April 4, citing possible delays due to economic uncertainty.

Circle's USDC enjoyed meteoric popularity during the last cryptocurrency bull market, growing from a market cap of less than $1bn in 2020 to over $50bn in 2022. Backed by dollar-based assets such as US Treasury bills, USDC generates substantial interest, which Circle retains rather than redistributing to holders.

The only catch is the likely onset of a cycle of falling interest rates, given that almost all of the platform's revenue comes from its stablecoin. Circle estimates that a 1% rate cut could reduce its revenue by $441m. However, lower rates could also redirect capital from traditional finance to decentralized finance, which is generally more lucrative because it is riskier.

Let's get back to the topic at hand. Circle is currently in talks with Ripple and Coinbase for a possible takeover.

Ripple attempted to acquire Circle on April 30, but its offer of $4bn to $5bn was deemed insufficient. The terms of the acquisition differ between the suitors: Ripple is reportedly offering payment in cash and XRP, while Coinbase would use cash and shares. With $8bn in cash, Coinbase appears to be the best-positioned potential buyer. A partnership with one of these players could fundamentally transform the operation of the USDC.

Stay tuned for more developments in the coming days...

(To find out more about Coinbase's inclusion in the S&P 500: Coinbase joins the S&P-500 giants - Crypto-recap