Coinbase Sued Over Data Breach, IPO Misstatements
Key Points at a Glance
Coinbase is once again at the centre of legal disputes. Investors in the COIN stock have filed a class action lawsuit. The reason is a data breach that was allegedly known months before it was officially disclosed. In addition, the plaintiffs accuse the company of lacking transparency regarding regulatory issues in the United Kingdom. The allegations concern both the security of user data and the company’s communication policy with investors.
What Happened?
On May 15, 2025, Coinbase publicly confirmed a data breach. Hackers had gained access to internal systems and customer data as early as December 2024. According to the lawsuit, Coinbase was aware of the incident by January 2025 at the latest. The delayed disclosure, according to the plaintiffs, led to significant losses in the value of COIN shares.
Stock Market Reaction
Following the announcement of the data breach, Coinbase’s stock price fell by 7.25% on May 15 and closed at USD 240. A previous incident had already caused a price drop in July 2024. At that time, the British subsidiary Coinbase Payments Ltd. was fined USD 4.5 million for violating anti-money laundering regulations. The stock dropped 5.5% that day, closing at USD 226.50.
What Are the Plaintiffs Demanding?
The class action lawsuit is led by Brady Nessler. It targets all investors who purchased COIN shares between April 14 and May 14, 2025. The plaintiffs are seeking compensation for losses incurred due to the delayed disclosure of the data breach and the inadequate communication of regulatory issues. According to the lawsuit, claims related to the data incident could exceed USD 400 million.
Further Legal Issues
Independent of the current lawsuit, Coinbase is also under investigation for allegedly false statements in its IPO prospectus regarding user numbers. These statements date back to 2021, when Coinbase went public. Here too, the allegation is that investors were harmed by incomplete or misleading information.
Market Development Despite Lawsuit
Despite the negative headlines, Coinbase’s stock price has recently recovered. Since its low point at USD 200, the stock has risen by 28% to USD 263. The increase is supported by the positive performance of Bitcoin and the overall crypto market.
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Our Assessment
The allegations against Coinbase are serious and raise questions about its internal security strategy and communication with investors. Particularly concerning is the long gap between the discovery of the data breach and its public disclosure. The fine in the UK also highlights that regulatory requirements were not adequately met. Transparency is a key factor for investors – and according to the plaintiffs, Coinbase has failed in this regard. Whether the lawsuit will be successful remains to be seen. Investors should closely monitor developments and realistically assess the risks associated with crypto companies.
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