Coinbase, the leading cryptocurrency exchange in the US in terms of trading volume, is currently facing strong criticism following reports that a staff member leaked sensitive customer data without authorization.

Customers are expressing anger after reports indicated that the breach was known internally months before Coinbase publicly disclosed the incident.

Outrage has been sparked within the cryptocurrency community by the insider breach which reportedly impacted a small portion of Coinbase’s monthly active users. Users have reported being victims of advanced phishing and impersonation scams.

One such victim, QwQiao, shared their experience of narrowly avoiding falling prey to a scam. They highlighted the importance of safeguarding private data such as government IDs and physical addresses, stressing that the risks go beyond financial losses.

The unauthorized access to customer data, uncovered as far back as January, has raised concerns about Coinbase's handling of personal information and the impact on users' security.

Experts suggest that Coinbase's potential silence on the matter may have made users susceptible to fraudulent activities for an extended period. Furthermore, the oversight in data protection may not only endanger individual holdings but also pose a systemic risk due to Coinbase's prominent role in the market.

The breach is especially troubling as it was an internal betrayal, not an outside hack, where a support staff member misused customer data for personal gain. This has underlined the necessity of robust internal controls within the exchange.

The incident has reignited discussions on the risks associated with centralized data repositories, particularly in the context of combining sensitive personal information with cryptocurrency holdings.

Despite the gravity of the situation, Coinbase has not yet directly addressed the public's concerns but has announced a reward fund for information leading to the apprehension of those responsible for the leak. Additionally, the exchange claims to have reached out to all affected customers to inform them of the breach.