Coinbase Faces Class-Action Lawsuit Over Data Breach

Coinbase and several company executives are facing a class-action lawsuit filed on May 22, 2025. Investors claim damages from a significant data breach that allegedly involved insider misconduct and resulted in substantial financial losses.

The case highlights ongoing challenges companies face with cybersecurity, impacting investor confidence and regulatory scrutiny.

The class-action lawsuit claims Coinbase failed to disclose a significant data breach affecting over 97,000 accounts. The breach reportedly exposed sensitive information from more than 69,461 customers. Coinbase has dismissed involved employees and is improving internal controls.

“Previously, lawsuits accused Coinbase of negligence and weak cybersecurity infrastructure,” suggested an ICO & Blockchain Expert,

highlighting a pattern in regulatory challenges faced by the company. source.

Several executives, including CEO Brian Armstrong and CFO Alesia Haas, are named as defendants. Lead plaintiff Brady Nessler alleges economic damages after purchasing securities during the class period. He cites the company’s handling of the data breach and subsequent regulatory issues.

Following news of the breach, Coinbase’s stock price dropped by 5.52%, closing at $231.52 on July 25, 2024. This decline has spurred legal action among shareholders, who argue they suffered financial losses due to delayed disclosure of the breach.

The U.S. Justice Department is reportedly investigating potential regulatory violations. A $4.5 million fine from the Financial Conduct Authority amplifies the seriousness of the breach.

Brian Armstrong, CEO of Coinbase, stated that the company is “enhancing internal controls” following the data breach and has dismissed the employees involved in the incident.

The lawsuit is the latest in multiple legal challenges faced by Coinbase in relation to cybersecurity failures. Experts suggest the breach may lead to tighter regulatory frameworks and technological advancements to enhance security. Similar historical precedents may provide insights into potential legal outcomes, affecting industry standards. Coinbase’s situation underlines the significance of robust security measures in the cryptocurrency sector.