Coinbase is facing a new class action lawsuit from investor Brady Nessler, filed on May 22, 2025, in a Pennsylvania federal court.
The lawsuit claims that Coinbase’s stock drop followed the disclosure of a $400 million data breach and a previous violation of a UK Financial Conduct Authority (FCA) agreement.
According to the lawsuit, Coinbase failed to protect internal systems. The breach involved bribed customer support agents who allowed attackers access to user account data.
Coinbase later revealed a $20 million extortion attempt related to the incident.
The Coinbase lawsuit says this led to a 7.2% fall in COIN stock price, dropping to $244 on May 15. The stock had been trading above $263 before the disclosure.
The plaintiff claims this caused financial damage to shareholders who held the stock during that period.
The lawsuit also includes Coinbase CEO Brian Armstrong and CFO Alesia Haas as defendants. It covers anyone who bought COIN stock between April 14, 2021, and May 14, 2025.
Coinbase Stock Drop Followed $400M Data Breach Disclosure
On May 15, Coinbase publicly stated it could face up to $400 million in damages due to a security breach. Attackers gained access by bribing insiders and stealing user data.
This announcement caused a sharp Coinbase stock drop, which the lawsuit ties directly to investor losses.
Although COIN stock recovered 9% the next day to close at $266 on May 16, the damage had already been done, the suit alleges. On May 23, the stock dropped again, closing at $263, and fell a further $1.62 in after-hours trading.
So far in 2025, COIN stock is still up nearly 6%. However, the lawsuit highlights the impact of the breach on short-term market value.
The Coinbase class action is the first investor lawsuit to directly connect share price losses to the Coinbase data breach.
UK Regulator Fined Coinbase for High-Risk Customer Onboarding
The lawsuit also refers to a separate issue from July 2024, when the Coinbase UK FCA division was fined $4.5 million.
The UK FCA said Coinbase UK violated a 2020 agreement by onboarding 13,416 high-risk customers, against regulatory instructions.
This FCA fine triggered another Coinbase stock drop, with COIN closing at $231.52 on July 25, 2024.
The lawsuit argues that Coinbase did not disclose this FCA breach at the time of its Nasdaq listing in April 2021.
Nessler stated in the filing that if she had known about the FCA violation earlier, she would not have purchased shares at those prices. She believes the stock was artificially inflated due to the lack of disclosure.
The Coinbase class action seeks damages and a jury trial, naming both current and past stockholders within the specified timeline.
At Least Six Lawsuits Filed Against Coinbase Over Data Breach
The recent Coinbase data breach has resulted in at least six other lawsuits, separate from this latest Coinbase lawsuit.
These suits claim the company mishandled user data and failed to inform customers in a timely manner.
Another legal filing, submitted in Illinois on May 13, focuses on biometric data practices. It alleges that Coinbase collected and stored biometric data without user notification, proper documentation, or a clear retention policy.
Coinbase has not commented on the investor suit or any of the data-related lawsuits. No statement has been issued following the May 15 breach announcement.
The Coinbase class action involving Nessler is currently open to all affected investors.
The outcome of the case may depend on how courts evaluate the timing and content of Coinbase’s disclosures regarding both the data breach and the FCA violation.
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