Coinbase Stock Tanks as Lawyers Circle Over Alleged Data Breach Cover-Up

Another day, another crypto company playing fast and loose with user data—only this time, Wall Street’s favorite digital asset casino is catching the heat.

Coinbase shares nosedived after revelations emerged about delayed disclosure of a security breach. The class action vultures are already circling, proving that in crypto, the only thing more volatile than prices is corporate transparency.

Funny how these ’web3 innovators’ still can’t get web1 security basics right. Maybe they were too busy counting their 30% trading fees to notice the hackers walking out the back door?

TLDR

• Coinbase faces class action lawsuit from COIN stock investors seeking compensation for losses between April 14 and May 14, 2025
• The exchange disclosed in May 2025 that hackers accessed user data in December 2024, causing COIN stock to drop 7.25% to $240
• Coinbase knew about the breach in January but delayed public disclosure until May 15, 2025
• Separate incident involved Coinbase’s UK subsidiary being fined $4.5 million in July 2024 for anti-money laundering violations
• Company estimates breach remediation costs could reach $400 million, while stock has since recovered to $263

Crypto exchange Coinbase is defending against a new class action lawsuit filed by shareholders who claim the company’s delayed disclosure of security incidents cost them money.

The legal action targets investors who purchased COIN stock between April 14 and May 14, 2025.

Lead plaintiff Brady Nessler filed the case in the U.S. District Court for the Eastern District of Pennsylvania on Thursday. The lawsuit names Coinbase CEO Brian Armstrong and CFO Alesia Haas as defendants alongside the company.

The lawsuit centers on a data breach that occurred in December 2024 but wasn’t publicly disclosed until May 15, 2025. Hackers successfully bribed Coinbase employees to gain access to the company’s systems and customer personal data.

Court documents show that Coinbase management knew about the security incident as early as January 2025. The company waited four months before informing investors and the public about the breach.

When Coinbase announced the data breach on May 15, COIN stock dropped 7.25% that day. The stock closed at $240, down from higher levels earlier in the trading session.

The exchange estimates that costs related to the breach could range between $180 million and $400 million. These expenses include remediation efforts and potential customer reimbursements.

UK Regulatory Fine Adds to Legal Claims

The lawsuit also references a separate incident involving Coinbase’s UK subsidiary, Coinbase Payments Ltd (CBPL). The UK Financial Conduct Authority fined the subsidiary $4.5 million in July 2024 for anti-money laundering violations.

Regulators found that CBPL allowed over 13,000 high-risk individuals to conduct transactions worth more than $220 million. This activity violated UK anti-money laundering laws and agreements with regulators.

COIN stock fell 5.5% on July 25, 2024, when news of the UK fine became public. The stock closed at $226.50 that day.

Investors claim Coinbase failed to properly disclose these regulatory issues in a timely manner. They argue this lack of transparency exposed shareholders to preventable losses.

Stock Recovery Despite Legal Challenges

Despite the ongoing legal issues, COIN stock has recovered from its May lows. The stock has gained 28% from $200 to reach $263 as of the most recent trading session.

The recovery reflects broader market gains in Bitcoin and other cryptocurrencies. Coinbase’s business often correlates with crypto market performance due to its role as a major exchange.

The class action lawsuit seeks damages for investors who acquired Coinbase stock during the specified period. Plaintiffs argue the company’s “wrongful acts and omissions” caused their financial losses.

Coinbase faces additional legal challenges beyond this class action case. The exchange is under investigation for allegedly falsifying user base numbers in its 2021 initial public offering filing.

The data breach disclosure came as Coinbase continues expanding its global operations and regulatory compliance efforts. The company has not publicly responded to requests for comment about the latest lawsuit.