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Recent events have sent shockwaves through the crypto community, particularly as Coinbase faces a daunting $400 million phishing bill following a security breach.
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This incident underscores the growing risks in the cryptocurrency exchange sector, where insider threats can lead to catastrophic financial implications.
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As reported by COINOTAG, Coinbase maintains that no sensitive information such as passwords or private keys were compromised during the attack.
Coinbase grapples with a $400 million cost from a phishing attack, raising concerns about security in crypto exchanges. Read more for insights and analysis.
Coinbase Faces $400 Million Bill After Insider Phishing Attack
On May 15, news broke that Coinbase fell victim to a sophisticated phishing attack orchestrated by cybercriminals who managed to recruit overseas support agents. These agents leaked user data, culminating in a substantial extortion attempt of $20 million worth of Bitcoin (BTC).
Coinbase confirmed that several customer support contractors were bribed to access internal systems, thereby compromising a limited amount of user account information.
“These insiders abused their access to customer support systems to steal the account data for a small subset of customers,” Coinbase stated, reassuring users that no passwords, private keys, or funds were jeopardized.
Despite only affecting less than 1% of monthly transacting users, the aftermath of this breach is expected to generate remediation costs ranging between $180 million and $400 million.
$1 Billion Bitcoin Exits Coinbase in a Day as Analysts Warn of Supply Shock
Simultaneously, Coinbase experienced a surge in Bitcoin withdrawals, with approximately 9,739 BTC—valued at over $1 billion—leaving the platform on May 9. This marked the highest daily outflow recorded in 2025, signaling a robust institutional appetite for Bitcoin.
“Institutional appetite for Bitcoin is accelerating,” commented André Dragosch, head of European research at Bitwise.
The outflow coincided with Bitcoin trading above $103,600 and was influenced by geopolitical developments, particularly the easing of tariffs between the U.S. and China. This market environment boosted investor confidence, stirring discussions of potential supply shocks that could drive Bitcoin prices higher.
DeFi Lender Aave Reaches $40 Billion in Value Locked Onchain
Aave, a prominent decentralized finance (DeFi) protocol, has reached an impressive milestone of over $40.3 billion in total value locked (TVL) as of May 12. This achievement highlights Aave’s standing in the competitive DeFi landscape.
According to DefiLlama, Aave v3, the latest version of the protocol, plays a crucial role in this success, allowing users to borrow cryptocurrencies while offering lenders an opportunity to earn yield.
“With these milestones, Aave is proving its dominance in the Lending Space,” remarked DeFi analyst Jonaso.
SEC Delays Solana ETF as Decisions for Polkadot, XRP Loom
In regulatory news, the U.S. Securities and Exchange Commission (SEC) has postponed its decision on a proposed spot Solana exchange-traded fund (ETF). The delay has left the cryptocurrency industry anxiously awaiting outcomes for anticipated ETFs related to Polkadot and XRP.
As detailed in a May 13 filing, the SEC has shifted its deadline for Grayscale’s spot Solana (SOL) Trust ETF to October 2025, sparking concerns about the broader regulatory environment affecting digital assets.
Spot ETFs can significantly influence liquidity and institutional adoption, as evidenced by Bitcoin’s resurgence after their launch. Although a Solana ETF might attract less capital than Bitcoin, it still holds potential for boosting institutional interest in Solana.
Starknet Hits “Stage 1” Decentralization, Tops ZK-Rollups for Value Locked
Starknet, an Ethereum layer-2 scaling solution, has reached an important decentralization milestone, labeled “Stage 1” by Ethereum co-founder Vitalik Buterin. This progress solidifies Starknet as the largest zero-knowledge rollup (ZK-rollup) network by total value locked.
Starknet’s achievement, detailed in a recent news release, emphasizes enhancements like the establishment of a security council and mechanisms for censorship avoidance. The current total value locked in Starknet stands at approximately $629 million, surpassing its closest competitor, ZKsync.
This development could further foster confidence among developers and investors in the Ethereum scaling solution space.
DeFi Market Overview
Latest data shows that most of the top 100 cryptocurrencies by market capitalization ended the past week positively. Among the notable gainers, the Solana-based memecoin Dogwifhat (WIF) surged by over 43%, while decentralized exchange Raydium’s (RAY) token rose almost 19%.
Thank you for reviewing our weekly wrap-up of significant DeFi trends. Stay tuned for next Friday’s edition for more insights into this rapidly evolving sector.
