Coinbase Stock Sinks 7% After Breach and Regulatory Backlash
Coinbase Global Inc. disclosed on May 15, 2025, that a data breach exposed personal information of less than 1% of its 9.7 million monthly transacting users.
The breach, which was carried out by hackers with assistance from bribed overseas support agents, compromised names, addresses, phone numbers, emails, partial bank account details, government ID images, and account balances. No passwords, private keys, or customer funds were accessed or stolen, according to the exchange.
The exchange refused to pay a $20 million ransom demand but instead offered a $20 million reward for information leading to the attackers’ arrest and bringing them to justice.
Coinbase Faces SEC Scrutiny Over 2021 User Claims
Adding to the exchange’s woes, the US Securities and Exchange Commission (SEC) is investigating the exchange for potentially misrepresenting user numbers in 2021, when it reported “100+ million verified users” in its IPO and marketing materials.
The exchange stopped reporting on this metric in 2023, citing its lack of reliability as a performance measure due to multiple accounts per user, and now reports “monthly transacting users.”
The investigation started under the Biden administration and continues under the Trump administration, despite the SEC having dismissed a 2023 lawsuit against the exchange for unregistered securities operations.
Chief Legal Officer Paul Grewal called the investigation a “holdover” issue, noting Coinbase’s cooperation.
While the SEC has questioned the exchange’s know-your-customer (KYC) compliance, Coinbase disagrees and states it isn’t a primary aspect of the investigation.
Coinbase Stock Falls by 7% as Breach and Investigation Scares Investors
Coinbase stock (COIN) fell 7% in the last 24 hours, closing at approximately $244 as a result of the double crisis.
Coinbase Stock Price (Source: Google Finance)
The decline reversed gains from the exchange’s recent inclusion in the S&P 500, a sign of investor concerns over the breach and regulatory difficulties.
The cryptocurrency industry’s general challenges, including $2.2 billion in losses to hacks in 2024, have increased investors’ and traders’ fear following the recent ransom attempt against the exchange.
