Coinbase is currently facing significant legal challenges after publicly disclosing a data breach that compromised sensitive personal information of its users. The breach was the result of cybercriminals bribing overseas customer support agents to access internal systems, leading to the theft of user emails, phone numbers, partial Social Security numbers, transaction histories, and other personally identifiable information (PII). Despite no compromise of passwords or private keys, the exposed data puts users at risk of identity theft and financial fraud with potentially long-term or permanent consequences.
Between May 15 and May 16, 2025, at least six class-action lawsuits were filed in U.S. courts accusing Coinbase of negligence, weak cybersecurity infrastructure, inadequate incident response, and failure to protect user data. Plaintiffs, including Paul Bender and other affected users, allege Coinbase did not maintain basic security protocols or properly train third-party vendors handling sensitive data. They criticize the company for delayed disclosure and failing to offer identity protection services promptly.
One lawsuit demands Coinbase purge outdated user data that should not have been retained, suggesting that this negligence amplified the breach’s impact. Coinbase has publicly refused to pay a $20 million ransom demanded by the attackers, offering a bounty to identify the culprits instead. The company fired implicated support staff, mostly based in India, and pledged full cooperation with law enforcement. It has earmarked between $180 million and $400 million for user reimbursement and remediation efforts, implemented stricter security measures, and established a U.S.-based customer support hub with enhanced insider threat detection.
Despite the legal backlash, Coinbase’s stock initially dropped but later rebounded, indicating investor confidence in its response. Nevertheless, the multiple lawsuits and regulatory scrutiny represent a significant challenge for Coinbase’s reputation and operational security going forward.