Cryptocurrency exchange Coinbase is facing a class action lawsuit filed by investor Brady Nessler in the US District Court for the Eastern District of Pennsylvania. The suit represents shareholders who bought Coinbase stock (ticker: COIN) between April 14, 2021, and May 14, 2025.
The lawsuit alleges that Coinbase and its top executives, including CEO Brian Armstrong and CFO Alesia Haas, delayed disclosing a significant data breach tied to insider misconduct, which involved customer data theft facilitated by bribed support staff. This breach reportedly impacted less than 1% of monthly active users but was discovered months earlier and only disclosed publicly on May 15, 2025, following a $20 million extortion attempt.
This delayed disclosure led to a 7.2% drop in COIN's stock price, closing at $244 on the day the breach was revealed. Additionally, the FCA fined Coinbase’s UK subsidiary CB Payments Ltd (CBPL) approximately $4.5 million in July 2024 for breaching a regulatory agreement by onboarding 13,416 high-risk customers, enabling nearly $226 million in cryptocurrency transactions in violation of restrictions.
The lawsuit accuses Coinbase of concealing these regulatory breaches, misleading investors about the company’s operational integrity, and causing significant stockholder losses. Following the FCA fine announcement on July 25, 2024, COIN’s stock fell by 5.52%, closing at $231.52.
Despite some recovery after the May 15 lows, COIN continued to experience volatility, including a 3.23% drop on May 23, 2025. Coinbase has yet to issue a public statement regarding the lawsuit or the FCA fine.
The case highlights ongoing challenges Coinbase faces with security, transparency, and regulatory compliance, reflecting broader implications for the cryptocurrency exchange sector.