Coinbase, a major player in the cryptocurrency exchange arena, now finds itself embroiled in a class action lawsuit. The litigation stems from accusations that the platform’s failures have led to significant financial losses for its investors.
Allegations of Negligence Against Coinbase
Recently, an investor took action by filing a class action in the US District Court for the Eastern District of Pennsylvania. The suit names Coinbase, along with its CEO Brian Armstrong and CFO Alesia Hass, citing “significant losses and damages” that shareholders have incurred over several years.
Investor Brady Nessler represents those who purchased or acquired publicly traded Coinbase securities between April 14, 2021, and May 14, 2025. The complaint details numerous “wrongful acts and omissions,” which are said to have prompted a sharp decline in the company’s stock value, adversely affecting Nessler and other class members.
The lawsuit identifies various omissions, including a serious data breach and failure to disclose a violation of a critical agreement with the UK’s Financial Conduct Authority (FCA).
In late 2020, Coinbase Payments (CBPL) entered into a voluntary accord to avoid onboarding clients deemed “high risk,” which was intended to mitigate potential illicit activities on the platform.
The lawsuit states that Coinbase made “materially false and misleading” claims, neglecting to reveal that CBPL had been cited by the FCA for lacking effective anti-money laundering systems, which led the company into legal jeopardy.
A notable incident occurred on July 25, 2024, when news broke that Coinbase’s UK division had been penalized for violating financial crime regulations, resulting in a decline of $13.52 per share in the company’s stock price, equating to a 5.52% drop.
Impact of Security Breaches on Investor Trust
Additionally, the class action suit emphasizes that the recent data breaches inflicted considerable damages on shareholders, highlighting events from May 15.
Brian Armstrong reported alarming details about hackers who managed to compromise Coinbase’s internal systems by bribing customer support contractors, which led to the exposure of personal data for a small fraction of users.
The attackers demanded a hefty ransom of $20 million in Bitcoin (BTC) to return the compromised data. However, Coinbase opted against paying the ransom.
Following these events, stock prices took a hit, plummeting by $19.85 per share—a devastating 7.2% decline—bringing the closing price down to $244 on May 15, 2025. In the aftermath, multiple lawsuits emerged, prompting an investigation by the US Department of Justice.
Consequently, the plaintiff seeks to “recover compensable damages caused by Defendants’ violations of federal securities laws under the Securities Exchange Act of 1934.”
