Crypto Exchanges Under Fire: Cyberattacks, Lawsuits & Big Milestones

According to PYMNTS.com, both Binance and Kraken were recently targeted by sophisticated social engineering cyberattacks, similar to the one that affected Coinbase. Sources cited by Bloomberg revealed that both exchanges managed to fend off the attacks without any customer data being compromised. The report highlights a growing trend of cyberattacks on crypto firms, coinciding with the rising value of digital assets such as bitcoin.

Earlier in the year, Bybit suffered a record-breaking $1.5 billion cyberattack, contributing to a 303% surge in cryptocurrency thefts during the first quarter. On May 15, Coinbase disclosed a data breach involving a small group of insiders who were bribed to copy customer support data, affecting less than 1% of its monthly transacting users. The attackers attempted to extort $20 million from Coinbase, which the company refused, opting instead to terminate the involved employees and refer them to law enforcement. Coinbase estimated the incident could cost up to $400 million, as stated in its SEC filing.

Exchange	Incident	Estimated Loss/Cost
Bybit	Cyberattack	$1.5 billion
Coinbase	Data breach & extortion attempt	Up to $400 million

Social engineering fraud has increased by 56% in the past year, according to the PYMNTS Intelligence report, “The State of Fraud and Financial Crime in the U.S. 2024: What FIs Need to Know.”

Binance and Kraken prevented customer data compromise through robust internal policies and technology.
Coinbase is reimbursing customers who were tricked into sending funds to criminals.

Key Takeaway: The crypto sector is facing a significant rise in social engineering attacks, but leading exchanges like Binance and Kraken have demonstrated resilience, while Coinbase faces substantial financial and reputational consequences.

Coinbase Joins the S&P 500, Marking a Milestone for Crypto

Quartz reports that Coinbase, the largest U.S. crypto exchange, officially joined the S&P 500 on May 19, replacing Discover Financial Services after its acquisition by Capital One. This move is seen as a major step toward mainstream legitimacy for the crypto industry, embedding it further into the traditional financial system.

Coinbase’s market capitalization stands at $67 billion, and its shares have risen almost 30% since the announcement, despite recent news of a hack. The inclusion in the S&P 500 compels passive index funds and active managers to purchase Coinbase stock, increasing demand and visibility. For many investors with 401(k)s or mutual funds, this means they now have indirect exposure to crypto assets.

“This isn’t merely a nod to Coinbase’s market capitalisation or financial performance. It reflects a broader institutional acceptance of crypto as an enduring component of global finance.” — Meryem Habibi, Chief Revenue Officer at Bitpace

Coinbase’s evolution from a retail trading platform to an infrastructure provider has helped it weather regulatory challenges.
The S&P 500 inclusion underscores the convergence of digital-native and traditional financial infrastructure.

Key Takeaway: Coinbase’s entry into the S&P 500 signals a new era of institutional acceptance for crypto, making digital assets an unavoidable part of mainstream investment portfolios.

Coinbase Faces Multiple Lawsuits Over Data Breaches

TradingView details that Coinbase is currently facing at least six lawsuits filed between May 15 and May 16, following its disclosure of a user data breach. Plaintiffs allege that Coinbase failed to maintain adequate security protocols and mishandled the aftermath of the breach. One lawsuit, filed in New York federal court, claims that sensitive personal information of millions of users was compromised, including names, addresses, phone numbers, emails, partial Social Security numbers, bank account identifiers, driver’s licenses, passports, and account data.

The breach, reported by Coinbase on May 15, involved a $20 million extortion attempt after cybercriminals bribed customer support agents to access internal systems. The lawsuits argue that Coinbase’s response was “inadequate, fragmented, and delayed,” and that users were not promptly informed or offered sufficient guidance or protection. The consequences for affected users could be long-term or permanent, given the nature of the compromised data.

Date	Event	Coinbase Share Price
May 15	Data breach disclosed	$244 (7% drop)
May 16	Share price recovery	$266 (9% spike)

Coinbase expects reimbursement expenses between $180 million and $400 million.
Several customer support agents in India were fired for alleged involvement in the attacks.

Key Takeaway: The lawsuits highlight ongoing concerns about data security and transparency at major crypto exchanges, with significant financial and legal implications for Coinbase.

Gate Unveils New Domain and Brand Logo, Aiming for “Next-Generation Crypto Exchange”

Morningstar reports that Gate, a leading global cryptocurrency trading platform, has adopted the new domain Gate.com and introduced a redesigned brand logo. This move is part of a broader strategy to unify its brand identity, strengthen its global presence, and enhance user trust. The rebranding follows Gate’s 12th anniversary and aligns with its vision to become the “next-generation crypto exchange.”

Gate serves over 23 million users worldwide and supports trading in more than 3,800 cryptocurrencies. The platform ranks among the top three globally by comprehensive strength and was one of the first to implement zero-knowledge proof (ZKP) technology for reserve transparency. According to its latest proof-of-reserves report, Gate’s total reserves exceed $10.865 billion, with a reserve ratio of 128.57%.

Users	Supported Cryptocurrencies	Total Reserves	Reserve Ratio
23 million+	3,800+	$10.865 billion	128.57%

Gate’s new strategy focuses on technology-driven innovation, global compliance, and ecosystem integration.
The platform has obtained regulatory approvals in jurisdictions including Lithuania, Argentina, Malta, Italy, Bahamas, Gibraltar, and Hong Kong.
Gate Dubai recently received a full operational license from the Virtual Asset Regulatory Authority (VARA) in Dubai.

Key Takeaway: Gate’s rebranding and strategic expansion underscore its ambition to lead the next generation of crypto exchanges, with a strong emphasis on compliance, security, and global reach.

Coinbase Sued in Illinois Over Biometric Data Practices

Crypto News reports that Coinbase is facing a class-action lawsuit in Illinois, alleging violations of the state’s Biometric Information Privacy Act (BIPA). The lawsuit claims that Coinbase improperly collected and stored facial data during its Know Your Customer (KYC) checks, without proper notice or consent. Plaintiffs argue that users were required to upload a government-issued ID and a selfie, which were processed by third-party facial recognition software, capturing biometric identifiers without adequate disclosure or consent.

The complaint also alleges that Coinbase transmitted facial data to vendors such as Jumio, Onfido, Au10tix, and Solaris without explicit permission. More than 10,000 individuals have reportedly filed for arbitration over these issues, but Coinbase has allegedly failed to pay the necessary arbitration fees, resulting in many cases being dismissed. The plaintiffs are seeking financial penalties of up to $5,000 per reckless violation or $1,000 for negligence, along with legal expenses and injunctive relief.

This is not the first BIPA-related lawsuit against Coinbase; a previous case was dismissed after being moved to arbitration.
The lawsuit comes amid heightened scrutiny following a recent data breach involving bribed customer support agents.

Key Takeaway: Coinbase’s biometric data practices are under legal scrutiny in Illinois, with potential financial penalties and reputational risks as the company faces multiple lawsuits over data privacy and security.

D2X and ABN AMRO Partner for Off-Exchange Digital Asset Custody

Ledgerinsights.com reports that cryptocurrency derivatives exchange D2X has partnered with ABN AMRO Clearing Bank to offer institutional clients off-exchange collateral management services for trading crypto futures and options. This arrangement allows D2X members to trade derivatives while their digital asset custody remains in segregated accounts held directly in their names at ABN AMRO Clearing.

D2X operates as a multilateral trading facility (MTF) regulated under MiFID and raised $10 million in a funding round led by Point72 Ventures last year. The partnership aims to eliminate counterparty risk by ensuring client assets are separated from the trading venue’s holdings, a model well-established in traditional markets. ABN AMRO has previously integrated Fireblocks’ digital asset custody technology and has experience with blockchain-based bond issuances and tokenized asset trading.

The partnership reflects a growing trend of traditional banks collaborating with crypto exchanges for institutional-grade custody solutions.
ABN AMRO’s preference for public blockchains supports transparency and interoperability in digital asset management.

Key Takeaway: The D2X and ABN AMRO partnership marks a significant step toward institutional adoption of crypto derivatives, providing enhanced security and regulatory oversight for digital asset trading.

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