Die by the Bitcoin: As kidnappings tied to crypto investments rise, some feel that exchanges like Coinbase aren’t doing enough to protect their users. Criminals now have access to home addresses and account balances, and if the situation worsens, people won’t just lose money – they could lose their lives.
Coinbase recently disclosed a serious security breach in which unknown cybercriminals accessed highly sensitive user data. While the company works to contain the fallout, the cryptocurrency exchange’s users now face potentially life-threatening risks. TechCrunch founder and crypto-enthusiast Michael Arrington argues that Coinbase and its executives should be held accountable.
Coinbase’s breach is especially significant because it operates the largest crypto exchange in the US and holds the world’s most valuable Bitcoin deposits. Founded by Brian Armstrong, the company estimates the breach could ultimately cost between $180 million and $400 million. Cybercriminals exfiltrated data, including home addresses and account balances – information that, according to Arrington, could be enough to “lead to people dying.”
I am a long time investor in and champion of @coinbase. Something that has to be said though – 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 $400m… pic.twitter.com/ruSYKAGH7x
– Michael Arrington (@arrington) May 19, 2025
People have likely already died because of the massive cyber-heist, Arrington recently said on his X account. Criminals could use the stolen data to target large crypto investors, meaning the breach’s human cost could far exceed the estimated $400 million in financial damages. Coinbase confirmed plans to reimburse those who lost their crypto assets – but you obviously can’t refund someone’s life.
Companies that fail to protect customer data must face consequences, and executives should at least face prison time. Arrington, a longtime investor and “champion” of Coinbase, expressed deep disappointment with how the company is handling the breach.
“Using the cheapest option for customer service has its price. And Coinbase’s customers will bear that cost,” he warned.
Arrington also calls for rethinking government regulations around “know-your-customer” (KYC) processes, which require users to verify their real identities to access online platforms. He argues that regulators enforced KYC to help governments monitor and tax crypto activity, but the policy now creates serious safety risks when exchanges mishandle user data.
Coinbase issued a handful of corporate-style statements addressing the concerns raised by Arrington and others. The company claims to take the matter seriously and is working with law enforcement to track down the criminals behind the breach. Crypto investors – and their families – were already targets of violent kidnappings before this incident. The situation will likely worsen for some of Coinbase’s wealthiest users.
