Coinbase, a leading cryptocurrency exchange, has faced criticism after reports emerged that approximately 1% of its customer data was compromised by overseas customer service employees. The breach has raised concerns about the security of personal information held by centralized platforms, particularly those requiring Know Your Customer (KYC) verification, which involves collecting real life addresses, crypto addresses, and real life ID documents. Several users and industry experts have pointed out the risks associated with centralized data storage, likening it to a 'honeypot' that attracts malicious actors. The incident has sparked a broader discussion on the need for more secure methods of handling user data, with some advocating for decentralized solutions like DeFi and the use of zero-knowledge proofs to enhance privacy and security. The breach has also highlighted issues with Coinbase's customer service, with some users reporting phishing attempts and others expressing frustration over the lack of communication from the company regarding the compromised data. Critics argue that outsourcing customer service to overseas locations, especially in low trust countries, increases the risk of data breaches by criminal syndicates and undermines user trust, suggesting that customer service should be based in the USA.