“Will lead to people dying” TechCrunch Founder on Coinbase Data Breach

TechCrunch founder Michael Arrington has issued warnings about serious consequences of Coinbase data leak. Despite being a self-described “long time investor in and champion of Coinbase,” Arrington has publicly criticised the exchange’s security practices. He also highlighted the severe risks created when hackers access sensitive customer information.

Arrington warns of deadly consequences of Coinbase data breach

As reported earlier,  Coinbase data breach resulted in upto $400 million hit for the exchange. Michael Arrington focused on the potential human cost rather than just the financial implications. As a self-described longtime investor and supporter of the exchange, his criticism carries particular weight in the crypto community.

“This hack – which includes home addresses and account balances – will lead to people dying. It probably has already,” Arrington stated in an X post. His comments about Coinbase highlight the physical danger crypto holders may face when their personal information and asset values become public.

Arrington contrasted the human impact with the financial costs the top crypto exchange faces. He posted that “the human cost, denominated in misery, is much larger than the $400m or so they think it will actually cost the company to reimburse people.”

The tech entrepreneur blamed the cost-cutting measures at Coinbase. He suggested the company prioritized profits over security: “Using the cheapest option for customer service has its price. And Coinbase’s customers will bear that cost.”

TechCrunch founder calls for executive accountability and KYC reform

Michael Arrington has advocated for stronger consequences for companies that fail to protect customer data. He specifically suggests that executives should face criminal penalties. “The consequences to companies who do not adequately protect their customer information should include, without limitation, prison time for executives,” he stated.

The founder extended his criticism beyond Coinbase to question the entire regulatory framework around cryptocurrency exchanges, particularly Know Your Customer (KYC) requirements. Arrington challenged the stated purpose of these regulations and mentioned that they serve tax collection rather than security purposes.

His analysis identifies a problematic intersection of government regulations, corporate profit motives, and inadequate penalty structures. “Combining these KYC laws with corporate profit maximization and lax laws on penalties for hacks like these means these issues will continue to happen,” Arrington explained.

The critique comes as the Coinbase data breach situation continues to develop, with reports that the US Justice Department plans to open an investigation into the data breach. The incident allegedly involved hackers bribing and recruiting overseas customer service agents to gain access to users’ personal information.

Other experts including Mark Palmer, MD Benchmark company said this is a very serious concern as people outside of company got access to user data. This is very sensitive information and can lead to significant loss of funds.

Meanwhile, coinbase stock is trading currently at $263.99 with a price expected to hit$310 next as per Palmer.