Coinbase Faces New Lawsuit Over Stock Drop Damages Following Data Breach

Coinbase is facing a new class action lawsuit claiming that investors suffered significant losses over the years due to the crypto exchange’s “omissions,” which have affected the company’s stock price.

Coinbase Accused Of Key ‘Omissions’

Last week, a Coinbase investor filed a class action lawsuit in the US District Court for the Eastern District of Pennsylvania against Coinbase, CEO Brian Armstrong, and CFO Alesia Hass, alleging that the company’s shareholders have suffered “significant losses and damages” over the past four years.

In the May 22 complaint, investor Brady Nessler, on behalf of persons or entities who purchased or otherwise acquired publicly traded Coinbase securities between April 14, 2021, and May 14, 2025, claims that the exchange has a long list of “wrongful acts and omissions” that have led to the “precipitous decline in the market value of the Company’s common shares” affecting the Plaintiff and other Class members.

Among the omissions, the lawsuit lists the company’s recent data breach and its failure to disclose that it breached its 2020 agreement with the UK’s Financial Conduct Authority (FCA).

In October 2020, the company’s UK subsidiary, Coinbase Payments (CBPL), signed a voluntary agreement to prevent onboarding clients considered “high risk” by the regulator and reduce potential criminal activity on the CBPL platform.

The lawsuit alleges that the company made several “materially false and misleading” statements at the time that omitted that Coinbase Payments, Ltd. (CBPL) had been found guilty by the UK regulator of having “inadequate anti-money laundering focused systems to prevent high-risk individuals from using its platform, and that CBPL then breached the Agreement designed to address those deficiencies, creating legal exposure.”

Notably, the price of the company’s common stock reportedly fell by $13.52 per share, a 5.52% decline, when a Reuters article titled “Coinbase UK unit fined for breaching financial crime requirements” was published during market hours on July 25, 2024. The FCA fined Coinbase’s UK subsidiary a $4.5 million penalty for breaching the voluntary agreement.

Data Breach Leads To Class Action Lawsuits

Moreover, the Class action suit argues that the recent data breaches also resulted in significant losses and damages for stockholders, highlighting the May 15 statement from the crypto exchange.

As reported by Bitcoinist, Brian Armstrong shared that threat actors bribed a handful of customer support contractors to access Coinbase’s internal tools, resulting in the breach of names, email addresses, limited transaction records, and partial Social Security numbers of 1% of the exchange’s users.

The hackers attempted to blackmail the exchange, demanding $20 million in Bitcoin (BTC) to return the sensitive customer data. However, Armstrong revealed they refused to pay the ransom.

The lawsuit states that, following the news, the price of Coinbase’s common stock fell by $19.85 per share, a 7.2% decline, to close at $244 on May 15, 2025. Since then, multiple lawsuits have been filed against the crypto exchange, and a US Department of Justice Investigation has been opened.

Based on this, Plaintiff seeks to “recover compensable damages caused by Defendants’ violations of the federal securities laws under the Securities Exchange Act of 1934 (the ‘Exchange Act’).”