Coinbase faces a class action lawsuit alleging delayed disclosure of a major data breach and undisclosed UK regulatory violations.
It claims that the financial losses suffered by stockholders were substantial due to Coinbase’s failure to report these incidents and is seeking compensation for the resulting losses.
Following a decline in its stock price, Coinbase is facing a lawsuit
Investor Brady Nessler initiated the litigation in the Eastern District of Pennsylvania of the United States District Court. The lawsuit is filed on behalf of shareholders who acquired Coinbase stock (COIN) between April 14, 2021, and May 14, 2025.
In the complaint, it is alleged that Coinbase failed to disclose crucial information regarding a data breach. It was previously reported that cybercriminals stole sensitive client data, including names, addresses, and identification details, to extort $20 million from Coinbase. The data was stolen by the perpetrators after they bribed overseas support agents.
The company, however, emphasized that the breach had a minimal impact on its monthly active consumers, with a percentage of “less than 1%.” The breach, which was identified months prior, was not disclosed until May 15, 2025, in the aftermath of the extortion attempt, as indicated by court documents. COIN experienced a 7.2% decline in value due to this disclosure, ultimately concluding at $244 on the same day.
“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages,” Nessler claimed.
Additionally, the lawsuit emphasizes an additional incident that had a detrimental effect on stock prices. The Financial Conduct Authority (FCA) of the United Kingdom (FCA) publicly fined Coinbase’s UK subsidiary, CB Payments Ltd. (CBPL), £3.5 million (approximately $4.5 million) on July 25, 2024, for violating a 2020 regulatory agreement that prohibited onboarding high-risk customers.
The FCA disclosed that CBPL had explicitly restricted its services, yet it permitted 13,416 high-risk users to access them, resulting in nearly $226 million in crypto transactions. The lawsuit contends that Coinbase’s neglect to disclose these regulatory issues further misled investors about the company’s operational integrity.
“On this news, the price of Coinbase’s common stock fell by $13.52 per share, or 5.52%, to close at $231.52 on July 25, 2024,” the lawsuit read.
The plaintiff is currently pressing for class certification and seeking reimbursement for legal fees, monetary damages, and a jury trial. Coinbase has not yet released a public statement regarding the Nessler lawsuit.
In the interim, COIN rebounded modestly from its lows on May 15. Nevertheless, the stock of Coinbase experienced a 3.23% decline in value when the market closed on May 23, according to Yahoo Finance data. This results in a $8.79 decrease in the stock price, now at $263.1.
