- An investor has filed a class action lawsuit against Coinbase, accusing the company of delaying the disclosure of a data breach and hiding regulatory violations, which led to significant stock price drops.
- The lawsuit seeks damages for shareholders who suffered losses following the revelations of a $20 million extortion attempt and a $4.5 million FCA fine.
Coinbase is facing a class action lawsuit that could shake investor confidence further. The crypto exchange giant is accused of withholding information on a major data breach and a regulatory penalty, both of which triggered significant declines in its stock price.
The suit, filed by investor Brady Nessler in the U.S. District Court for the Eastern District of Pennsylvania, targets Coinbase and its leadership — including CEO Brian Armstrong and CFO Alesia Haas. The complaint alleges that Coinbase failed to promptly disclose a damaging security breach involving insider misconduct, as well as a $4.5 million fine from the UK’s Financial Conduct Authority (FCA).
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The breach, reportedly tied to a $20 million extortion scheme, involved overseas support agents bribed to steal customer data such as names and identification documents. While Coinbase claimed that less than 1% of monthly active users were affected, the breach wasn’t made public until May 15, 2025. On that day, Coinbase’s stock (COIN) dropped 7.2%, closing at $244.
“Defendants’ wrongful acts and omissions led to a sharp drop in the company’s market value,” Nessler alleged, citing substantial investor losses.
Adding to the turmoil, the lawsuit highlights a separate incident in July 2024 when the FCA fined Coinbase’s UK arm, CB Payments Ltd., for onboarding over 13,000 high-risk users in violation of a 2020 agreement. The news sent Coinbase shares down 5.52%, closing at $231.52 on July 25.
Nessler’s legal team seeks class certification, financial damages, and a jury trial. Coinbase has yet to respond publicly.
Despite these setbacks, COIN showed some resilience, rebounding slightly in late May. However, on May 23, shares dipped again by 3.23%, closing at $263.10, according to Yahoo Finance.
This lawsuit underscores growing concerns over regulatory transparency and cybersecurity within the cryptocurrency sector — issues that could have far-reaching implications for Coinbase and the broader digital asset market.
