On December 27, 2025, Coinbase CEO Brian Armstrong tweeted that the Hyderabad police in India had arrested a former Coinbase customer service employee and were still pursuing more individuals involved in the case.
This is related to a data breach incident estimated to have caused losses of up to $400 million. On June 2 of last year, according to reports from Reuters, six insiders revealed to Reuters that Coinbase had known as early as January of last year that its customer service outsourcing partner, TaskUs, had experienced a user data breach. An employee at the customer service center established by TaskUs in Indore, India, was found to have taken photos of work computers with their personal phone and was suspected of selling Coinbase user data to hackers along with an accomplice. The hackers used this information to impersonate Coinbase employees, tricking victims into giving up their cryptocurrency and demanding a $20 million ransom for the user data from Coinbase.
However, despite making progress in pursuing those involved in such a serious security incident, Coinbase has not publicly indicated that they will turn to hiring employees from other countries or regions, or from within the United States. This has led to much dissatisfaction on X, with critics arguing that outsourced services from India are unreliable and that Coinbase lacks a serious attitude towards user data security.
Although TaskUs is not an Indian company, the issues indeed occurred at TaskUs's Indian branch. Moreover, Coinbase is not the only company to suffer losses due to malicious actions by Indian outsourced employees.
One of the most notorious "insider" cases in the e-commerce sector is Amazon's outsourcing of "seller support" and "anti-fraud review" services to third-party providers located in Hyderabad and Bangalore, where some Indian outsourced employees were communicated with and bribed by third-party sellers through channels like Telegram. For each negative review deleted, account reinstated, or internal sales data of competitors leaked, employees could earn cash rewards ranging from hundreds to thousands of dollars, while these outsourced employees had a monthly salary of only about $300 to $500.
Microsoft also outsourced its basic technical support services to third-party providers in India, where outsourced employees, dissatisfied with their meager salaries, sold information to scam groups and even actively guided customers to click on phishing websites or purchase fake services during work hours.
The model of outsourcing customer service, customer support, auditing, and other business processes to external service providers is known as "BPO (Business Process Outsourcing)." To reduce costs, improve efficiency, and focus on core business, these repetitive and non-creative business processes are handed over to third parties.
Despite the numerous issues that have arisen, India remains the king of the global outsourcing industry. A report from Astute Analytica shows that in 2024, the Indian BPO market size was approximately $50 billion, and it is expected to reach $139.35 billion by 2033. Indian workers handled 35% of the industry's voice-based business processes, while they managed 45% of non-voice (email, online chat, etc.) business processes.
A massive scale, accompanied by chaos caused by structural issues. Capable of solving problems, yet also capable of creating them. What is the real situation behind Indian outsourcing?
Cheap is indeed irresistible
Everyone says that one of the advantages of Indian outsourcing is definitely "cheap." This is true and even explains why Coinbase experienced a data breach incident with losses of up to $400 million.
When TaskUs finally discovered the data breach, the mastermind Ashita Mishra had over 10,000 Coinbase user data stored on their phone, and the employee received $200 for each photo taken of user account data. Ashita Mishra sometimes took as many as 200 photos in a single day.
According to data from 6figr.com, TaskUs offered salaries for customer support positions ranging from 330,000 to 400,000 rupees per year, which converts to about $3,700 to $4,440. Converted to a daily wage, it amounts to no more than $15 per day.
This means that Ashita Mishra's daily income from "taking photos" could be over 2,600 times the daily wage, which explains why hackers chose to bribe TaskUs's outsourced employees and why they were able to succeed in bribery.
In contrast, Coinbase's expected salary level for the "Customer Support Agent" position on web3.career is between $69,000 and $77,000.
The salary gap between "formal positions" and "outsourcing" is enormous, yet there was no stricter control over data access permissions for outsourced employees, which is the reason for this data security incident at Coinbase.
As long as the labor costs saved by outsourcing exceed the compensation for incidents, these companies will continue to operate. We cannot say they are shortsighted for sacrificing long-term interests. After the incident, these companies have taken measures to prevent similar incidents from happening again. For example, the Indian customer service positions that Coinbase directly hires now were changed from outsourcing to direct hiring after the incident. Amazon's seller support center now implements extreme physical controls, requiring employees to hand over their phones and smartwatches before entering the office area, and prohibits paper and pens on desks.
"Cheap" is certainly a significant advantage, but if we shift our perspective to these ordinary outsourced employees who perform specific tasks, "cheap" actually stems from the fact that outsourcing is a labor arbitrage industry. The process of transferring work or production processes to locations with lower labor costs for arbitrage is inherently difficult to escape from layers of "subcontracting." A single outsourcing contract from a large enterprise may even be subcontracted 2-4 times, with each subcontracting deducting commissions, management fees, and profits.
Although there is no public data to tell us how much Coinbase actually paid TaskUs, resulting in TaskUs's Indian employees earning less than $15 a day, a research report from Astute Analytica last year on the outsourcing market indicated that in India's first-tier cities, the monthly salary for each position is about 15,000 to 20,000 rupees (approximately $165 to $220), while in second-tier cities, it is even lower, at 8,000 to 12,000 rupees (approximately $88 to $132). So what are the billing standards set by outsourcing companies as service providers? For voice processes, it is $12 to $15 per hour, and for non-voice processes, it is $18 to $22 per hour.
This is roughly equivalent to working non-stop for 24 hours straight for a month, while the outsourcing company only pays the outsourced worker the equivalent of one day's salary. Because this job is so demanding, employee turnover is extremely high, with a turnover rate of 30%, which is still an improvement from the previous 50%.
You might think, it's just making phone calls and doing customer service, how high of a salary can one expect? In reality, the global outsourcing that India handles poses a different level of challenge for customer service. In 2024, the U.S. contributed 55-60% of revenue to the Indian outsourcing industry. Considering that there is about a 12-hour time difference between India and the U.S., employees can essentially work in an environment and schedule that never sees daylight. As Indian customer service representatives, they communicate with users from Europe and the U.S., which requires not only a proficient grasp of business knowledge but also minimizing their accent for better understanding, as well as familiarizing themselves with the dialects, word choices, and cultures of their counterparts for more efficient communication.
Cheap is indeed irresistible, and it is built on the hard work and sweat of ordinary Indians.
The rise of "cheap labor": The journey of Indian outsourcing
In the early 1990s, India's per capita salary was less than 1/10 of that in the U.S. Moreover, India had a large pool of educated workers who could work in English. This led American managers to realize that instead of looking for expensive programmers domestically, it was better to outsource tasks to India, where there were almost no barriers in document exchanges and conference calls.
Not only was there no "language barrier" in communication, but India also had about a 12-hour time difference with the U.S. American companies would pass tasks to India at the end of their workday, and Indian employees would start working; by the time American employees returned to work the next day, the tasks would already be completed. This "sun never sets" development model greatly shortened project cycles.
Doesn't it sound like the "offline auto-upgrade" experience in mobile games? This is also known as the "time zone dividend."
As the saying goes, "timing, location, and harmony," when the turn of the century occurred over 20 years ago, the "Y2K bug" crisis became the "timing" for India's IT industry. Faced with the complex and tedious information and data storage issues caused by the "Y2K bug," European and American companies, due to a shortage of IT talent and high labor costs, turned to outsource their data processing work to Indian companies that had cost and language advantages. Indian companies, in turn, gained experience and customer channels while solving the "Y2K bug" for European and American enterprises, thus gaining a reputation and entering the fast lane of the industry.
To shed the label of "cheap labor," Indians also thought of a universally applicable good method—certification. By the late 1990s, nearly 75% of the companies globally that obtained CMM Level 5 (the highest level of software production capability maturity) certification were Indian companies. Holding such certificates meant establishing an image of specialization and process, which Indians recognized nearly 30 years ago.
As this developed, the Indian government also realized this was a good industry. The IT industry does not require physical infrastructure; with the right internet connections and talent, it can snowball. Thus, India established numerous software technology parks (STPI) early on, providing satellite links (to address the issues of poor infrastructure and power outages) and tax incentives. India's top universities also continuously trained excellent talent relevant to the industry.
In this way, India gradually figured out the complete formula for conquering the global outsourcing market—cheap English-speaking talent + seizing historical opportunities (Y2K bug) + certification to establish professional processes + government support + continuous talent cultivation. With this formula, they succeeded.
However, now this formula is beginning to show signs of differentiation.
High-end "offshore outsourcing," low-end "struggling"
Indians are certainly not content to only engage in low-end outsourcing for repetitive tasks; they are also evolving. In recent years, an increasing number of well-known companies have established GCCs (Global Capability Centers) in India. Currently, India has over 1,900 GCCs, with about 35% of Fortune 500 companies having such "wholly-owned" technology and R&D bases in the country.
These companies include giants from various industries, such as financial sector leaders like JPMorgan Chase, Goldman Sachs, HSBC, and Wells Fargo, tech giants like Microsoft, Amazon, and Google, and retail giants like Walmart and Target.
These GCCs no longer handle customer service or basic code maintenance tasks; instead, they are directly affiliated with their parent companies and are responsible for global, core business operations. The R&D and innovation activities of Indian GCCs are now contributing over 50% of revenue to the industry, and about 45% of Indian GCCs have begun managing the end-to-end global product lifecycle, from concept design to final release, all completed in India. In other words, not only are Indians cheap and attractive, but they also deliver real value.
GCCs are like these global top companies leaving their home countries to conduct "offshore outsourcing" in India.
It is hard to imagine that even Japanese companies have significantly started to escape their homeland in the past year to establish GCCs in India. Honda and Hitachi expanded their R&D scale in India in 2025. Their reasoning is that digital transformation in Japan is too slow, and there is a talent gap, while in India, they can acquire cutting-edge AI and Software Defined Vehicle (SDV) technology at one-third the cost of Japan.
In India, if you want to recruit 500 engineers with specific cloud technology skills within a month, the recruitment market in Bangalore or Hyderabad can respond quickly. India currently has about 20% of the world's digital skill talent. In the fields of generative AI, cybersecurity, and cloud architecture, its talent pool is unmatched by other regions (such as Eastern Europe or Latin America).
Moreover, university graduates from India also love to work in these GCCs, as they do not have to leave their hometowns and enjoy the same benefits and career development paths as employees at the headquarters of these global companies. The flywheel is spinning again.
As for customer service, auditing, and other repetitive, non-creative outsourcing work, although there are some countries like Vietnam and the Philippines that can compete with India based on "cheapness," the most significant threat to India comes from the rapidly evolving AI technology.
Conclusion
Therefore, Coinbase's attitude is not surprising; it is a pragmatic business decision, but the incident also exposed significant internal management vulnerabilities.
Are there vulnerabilities? No problem, we at Coinbase will catch those responsible, make the necessary fixes, and then continue to operate as usual.
The reason why Indian outsourcing can "dominate the world" is now quite clear—there are no places with more talent that are cheaper than it, no places with better English that are cheaper than it, and no places with more talent that are cheaper than it…
However, this advantage that allows large companies to be satisfied and engage in light-hearted discussions also reflects the exhaustion and hardships of the employees.
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