Coinbase faces mounting legal pressure as a new class action lawsuit emerges over its recent data breach and regulatory compliance issues, causing significant stock price volatility. The breach adds to growing security concerns in the crypto exchange sector, where hacks have already caused $623M in losses this year.
Key Lawsuit Details and Stock Impact
Filed in the US District Court for the Eastern District of Pennsylvania, investor Brady Nessler’s lawsuit targets Coinbase, CEO Brian Armstrong, and CFO Alesia Hass. The legal action represents investors who held Coinbase securities between April 2021 and May 2025, claiming substantial financial damages from alleged company omissions.
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Critical Security Breach Impact
The data breach exposed sensitive information of approximately 1% of Coinbase users, including:
- Names and email addresses
- Limited transaction records
- Partial Social Security numbers
- Internal system access through compromised contractor credentials
Financial Fallout and Stock Performance
The lawsuit highlights two major stock price impacts:
| Event | Stock Drop | Date |
|---|---|---|
| Data Breach Announcement | 7.2% ($19.85) | May 15, 2025 |
| FCA Fine News | 5.52% ($13.52) | July 25, 2024 |
Regulatory Compliance Issues
Beyond the data breach, the lawsuit cites Coinbase’s failure to disclose its breach of a 2020 agreement with the UK’s Financial Conduct Authority (FCA), resulting in a $4.5 million fine for inadequate anti-money laundering controls.
Frequently Asked Questions
How many Coinbase users were affected by the data breach?
Approximately 1% of Coinbase’s total user base had their data compromised in the breach.
What damages are investors seeking?
Investors are seeking compensatory damages under the Securities Exchange Act of 1934 for losses related to stock price declines.
How much did Coinbase’s stock price fall after the breach?
The stock dropped 7.2% ($19.85 per share) to close at $244 following the data breach announcement.