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
- Lawsuit also references July 2024 UK regulatory fine of $4.5 million against Coinbase’s UK subsidiary for anti-money laundering violations
- Investors claim Coinbase failed to promptly disclose the data breach and regulatory issues, exposing them to financial losses
- Coinbase estimates the data breach could cost between $180-400 million in remediation and customer reimbursement
Coinbase is facing a new class action lawsuit filed by stock investors who claim the cryptocurrency exchange’s delayed disclosure of a data breach and regulatory violations caused them financial losses. The lawsuit was filed by investor Brady Nessler in the U.S. District Court for the Eastern District of Pennsylvania on behalf of investors who purchased COIN stock between April 14 and May 14, 2025.
The legal action centers on Coinbase’s disclosure on May 15, 2025, that the company had suffered a data breach in December 2024. According to court documents, hackers successfully bribed Coinbase employees to gain access to the company’s systems and obtain customers’ personal data. The exchange knew about the breach as early as January but only disclosed it publicly in May.
When Coinbase confirmed the data breach on May 15, the company’s stock price fell 7.25% and closed at $240. The sudden drop prompted investors to file the lawsuit, claiming they were not adequately informed about the security incident. Coinbase has estimated that the data breach could result in costs ranging between $180 million and $400 million for remediation and customer reimbursement.
The lawsuit also references a separate regulatory issue from July 25, 2024. Coinbase’s UK subsidiary, Coinbase Payments Ltd, was fined approximately $4.5 million by the UK’s Financial Conduct Authority for breaching anti-money laundering laws. The regulator found that the subsidiary allowed over 13,000 high-risk individuals to conduct transactions worth more than $220 million, violating established regulations.
Data Breach Details and Timeline
Court filings reveal that cybercriminals gained unauthorized access to Coinbase’s systems through employee bribery in December 2024. The breach compromised users’ personal data, though specific details about the type and extent of information accessed have not been fully disclosed. Coinbase’s internal teams became aware of the security incident in January 2025 but waited until May to inform the public and investors.
The plaintiffs argue that Coinbase “failed to take reasonable steps to secure” user accounts despite knowing the risks associated with hacking in the cryptocurrency industry. They claim the delayed disclosure prevented investors from making informed decisions about their COIN stock holdings during the four-month period between the company’s internal awareness and public disclosure.
Regulatory Violations and Stock Impact
The lawsuit incorporates the July 2024 UK regulatory violation as part of a pattern of inadequate disclosure. When news of the FCA fine became public, COIN shares dropped 5.5% and closed at $226.50. The Financial Conduct Authority determined that Coinbase Payments Ltd had violated a 2020 agreement by providing services to high-risk customers without proper compliance measures.
Investors claim these regulatory issues should have been disclosed more promptly to allow shareholders to assess the potential financial impact on the company. The lawsuit names Coinbase CEO Brian Armstrong and CFO Alesia Haas as defendants alongside the company itself.
Despite the legal challenges, COIN stock has recovered from its May lows. The stock has rallied 28% from $200 to $263, benefiting from Bitcoin’s price recovery and broader cryptocurrency market gains. The stock closed at $263.16 on May 23, according to market data.
The class action seeks to recover damages for investors who acquired Coinbase stock during the specified period. In addition to this lawsuit, Coinbase faces a separate legal investigation regarding allegations that it falsified user base numbers in its 2021 initial public offering filing.
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