Coinbase Faces New Lawsuit Over Stock Drop Damages Following Data Breach

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Well, look who’s in the hot seat again. Coinbase is now facing a fresh class action lawsuit. Apparently, investors are crying foul over the crypto exchange’s alleged “omissions” that have resulted in their wallets shrinking faster than a crypto value chart during a market dip.

Coinbase Accused Of Key ‘Omissions’

So, last week an investor named Brady Nessler decided to take Coinbase to court in the US District Court for the Eastern District of Pennsylvania. His lawsuit targets not just Coinbase, but also CEO Brian Armstrong and CFO Alesia Hass. Apparently, this isn’t just some petty complaint—Nessler claims that Coinbase shareholders have been suffering major losses for four years. Yeah, four whole years of “significant damages.” That sounds… impressive, right?

The lawsuit, filed on May 22, claims that anyone who bought Coinbase stocks between April 14, 2021, and May 14, 2025, has been subjected to a series of “wrongful acts and omissions.” This, according to Nessler, led to the company’s stock price dropping faster than your average person’s Bitcoin portfolio.

And guess what’s on that list of “omissions”? A little thing called a data breach. Oh, and how about failing to mention that it broke a deal with the UK’s Financial Conduct Authority (FCA)? Smooth move, Coinbase.

Back in October 2020, Coinbase’s UK subsidiary, Coinbase Payments (CBPL), signed a voluntary agreement to prevent any “high-risk” clients from sneaking onto their platform. But, surprise, surprise—CBPL apparently ignored that agreement, which didn’t do much for its reputation in the eyes of regulators.

The lawsuit claims that Coinbase conveniently left out a few juicy details, including the fact that the UK regulators found CBPL guilty of failing to prevent high-risk individuals from using its platform. Apparently, those “inadequate anti-money laundering systems” didn’t quite cut it. And to top it all off, CBPL breached the agreement to fix those issues. You can almost hear the “oops” echoing from Coinbase’s headquarters.

And, in case you’re wondering just how this all played out, here’s the real kicker: the stock price dropped by $13.52 per share, which is a 5.52% decrease, the moment a Reuters article called “Coinbase UK unit fined for breaching financial crime requirements” was published during market hours on July 25, 2024. That’s right—$4.5 million fine for Coinbase’s UK branch, and the shareholders are picking up the tab.

Data Breach Leads To Class Action Lawsuits

But wait, there’s more. The class action lawsuit also claims that a data breach earlier this year caused even more financial heartache for stockholders. Remember May 15? Well, that’s the day Coinbase dropped the bombshell that hackers bribed some of their customer support contractors to access Coinbase’s internal tools. As a result, the personal details of 1% of users—names, emails, limited transaction records, and partial Social Security numbers—were exposed.

And, of course, the hackers did what any self-respecting cybercriminal would do—they demanded $20 million in Bitcoin to return the data. Coinbase, however, did not take the bait. They told the hackers, “No thanks,” which only made their stock price plummet further. Imagine that: the price of Coinbase’s common stock dropped by $19.85 per share, a 7.2% decline, closing at $244 on May 15, 2025. Ouch.

Since then, things have only gotten worse for Coinbase. Multiple lawsuits have been filed, and the US Department of Justice has opened an investigation. Fun times, right?

The plaintiff, Brady Nessler, is now seeking to recover “compensable damages caused by Defendants’ violations of the federal securities laws under the Securities Exchange Act of 1934 (the ‘Exchange Act’).” Let’s just say this isn’t over yet, folks. Grab your popcorn—this show is far from finished.

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2025-05-27 02:43