Coinbase Hit With Lawsuit After $20M Hack and Hidden FCA Violation Exposed

Coinbase faces lawsuit over hidden $20M breach and UK fine, sparking stock drops and shareholder outrage.

Fridah Kangai
May 27, 2025
4:00 pm

Fridah Kangai

Fridah Kangai is a dedicated crypto journalist with a sharp eye for market trends, blockchain innovation, and digital asset movements. She specializes in breaking down complex topics into clear, engaging stories for both seasoned investors and curious newcomers. With a passion for decentralization and a pulse on the ever-evolving crypto space, Fridah delivers timely, accurate, and insightful coverage. Her work bridges the gap between technology and everyday understanding in the world of cryptocurrency.

Coinbase sued over concealed $20M data breach and regulatory fine tied to UK watchdog
Shareholders allege Coinbase withheld key risk info before and after going public
Legal pressure mounts as multiple lawsuits follow breach, including biometric data claims

Coinbase is now involved in a legal complaint, brought on by a shareholder, about a recent $20 million cyberattack and a fine from British regulators. The complaint, which was filed on May 22, alleges that the crypto exchange hid vital information that significantly affected its stock price and fooled investors.

Shareholder Brady Nessler started the class-action suit, saying Coinbase hid a significant data breach that occurred months earlier until May 15. In this case, hackers convinced overseas customer service reps to offer them access to the company’s systems and take users’ personal information, such as documents, for identification.

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

The hackers demanded a $20 million ransom, and despite Coinbase saying only a small percentage of its customers were impacted, revealing the incident after a delay caused its share price to fall by 7.2 percent. COIN shares finished trading at $244 when the news was released, rose to $266, and fell to $263 by May 23.

Undisclosed UK Fine Resurfaces Amid Shareholder Backlash

The lawsuit also covers a regulatory penalty that the UK Financial Conduct Authority handed down along with the breach. Last July, the FCA penalized Coinbase $4.5 million since it allowed more than 13,000 high-risk individuals to interact with its platform before July 2020.

According to Nessler, Coinbase did not share this problem during its public offering in 2021. The suit claims that failing to include this information made it appear the company had less risk, which drove up the price of its shares. The suit also names Brian Armstrong, the CEO, and Alesia Haas, the CFO, for not sharing this information with investors.

The lawsuit is for those who purchased Coinbase shares from April 14, 2021, through May 14, 2025. It includes events like the undisclosed data breach and FCA’s violation.

It’s facing at least six additional lawsuits over the breach. In one of the cases, the plaintiffs argued that the company had not told them before handling their biometric data.

The growing number of legal and regulatory problems is jeopardizing Coinbase’s commitment to honesty and risk prevention.

Also Read: Robert Kiyosaki Reveals Why Only Bitcoin Can Save You From Being Poor