Investor Files Lawsuit Over Coinbase Stock Drop After Data Breach and FCA Fine

Highlights:

• Coinbase is sued for losses after a data breach and FCA rule break.
• Earlier this month, hackers stole user data, leading to a drop in Coinbase’s stock.
• Last year, FCA fined Coinbase for letting high-risk customers trade, causing stock to fall.

Coinbase, a prominent cryptocurrency exchange, is facing a new legal challenge amid ongoing lawsuits. On May 22, Brady Nessler, a shareholder of Coinbase Global Inc. (COIN), initiated a class action lawsuit in the United States District Court for the Eastern District of Pennsylvania. The lawsuit alleges that the disclosure of a recent data breach and the supposed violation of an agreement with the UK’s Financial Conduct Authority (FCA) led to a sharp drop in the company’s stock price. This caused shareholders to experience substantial losses and damages.

Coinbase faces another class-action lawsuit over its data breach, with investors claiming damages from the stock price drop following the disclosure. pic.twitter.com/E0DGDP68Bg

— BULLSTREET GROUP (@Bullstreetgroup) May 26, 2025

Coinbase Data Breach Exposes User Information and Impacts Stock Price

The exchange revealed the data breach on May 15 and said its damages could total as much as $400 million. The hacker had bribed customer support agents to gain access to the company’s systems. They stole private consumer data like names, addresses, and identity details and demanded $20 million from Coinbase. The firm declined to pay the ransom and instead offered a $20 million reward to find the attacker. The company later confirmed that sensitive information from at least 69,461 customers was exposed.

The data breach impacted under 1% of Coinbase’s monthly active users. Following the disclosure, the company’s stock dropped by 7.2%, ending the day at $244 per share. Although the stock rose to $266 the following day, it dropped again and closed at $263 on May 23. Despite these ups and downs, COIN is still up almost 6% for 2025.

FCA Fine Sparks Additional Stock Drop and Legal Challenges

In July last year, Coinbase’s UK branch was fined $4.5 million by the Financial Conduct Authority. This happened because Coinbase broke a voluntary agreement made in 2020. The agreement was meant to stop Coinbase from adding customers that the FCA considered high-risk.

Although Coinbase had an agreement in place, it still onboarded 13,416 customers classified as high-risk and provided them with access to its crypto services. The FCA viewed this as a serious violation of their rules. Nessler’s lawsuit states that the announcement of the FCA’s fine led to a significant drop in Coinbase’s stock price. On July 25, the stock closed at $231.52, down more than 5% from before the announcement. This drop hurt investors who owned shares at that time.

The class-action lawsuit seeks compensation for all individuals who purchased Coinbase stock between April 14, 2021, and May 14, 2025. Coinbase’s CEO, Brian Armstrong, and CFO, Alesia Haas, are named as defendants in the case. Coinbase has yet to make a public comment regarding the recent lawsuit.

Nessler’s complaint is the first to claim damages from Coinbase’s stock drop after the breach was revealed. After the data breach news, Coinbase faced at least six lawsuits. All accused the exchange of handling the situation poorly and not protecting user data.