Coinbase Faces Class Action Lawsuit Over Data Breach and UK Compliance Disclosure

Coinbase is facing a class action lawsuit from shareholders who allege the cryptocurrency exchange failed to promptly disclose key information, including a serious data breach and a regulatory violation involving its UK subsidiary. The suit, filed in the U.S. District Court for the Eastern District of Pennsylvania, claims the lack of transparency led to financial losses for investors.

Filed by investor Brady Nessler, the complaint outlines what it calls a pattern of “omissions” by Coinbase over the past several years. Among the most pressing issues: the company’s delayed acknowledgment of a data breach in December 2024, where hackers bribed employees to gain access to sensitive user data. Coinbase only publicly revealed the incident on May 15, 2025.

The market reaction was swift. Following the disclosure, Coinbase shares dropped 7.2%, closing at $244 that day. The company later estimated the breach could cost between $180 million and $400 million in remediation and customer reimbursements.

Adding to the controversy, the lawsuit also points to CB Payments, Coinbase’s UK-based subsidiary, which allegedly violated a 2020 agreement with the Financial Conduct Authority (FCA). Shareholders claim Coinbase failed to disclose the breach of that regulatory agreement in a timely or transparent manner.

Named in the suit are Coinbase CEO Brian Armstrong and CFO Alesia Haas, along with the company itself. The legal action aims to recover damages for investors who purchased Coinbase stock between April 14, 2021, and May 14, 2025.

Despite the recent turmoil, Coinbase’s stock has recovered some ground, closing at $263.16 as of May 23, 2025, according to Google Finance. The company has not yet publicly commented on the lawsuit.