Investor Sues Coinbase Over Delayed Disclosure of Data Breach
Coinbase faces a lawsuit from investor Brady Nessler over delays in disclosing a December data breach and possible violations of an agreement with a UK regulator, which led to the company’s share price drop.
Coinbase now faces a new investor lawsuit following a sharp drop in its stock price. Filed by investor Brady Nessler in the U.S. District Court for the Eastern District of Pennsylvania, the suit alleges that the crypto exchange failed to timely disclose a major user data breach.
In addition, the complaint points to an alleged breach of an agreement with the UK’s Financial Conduct Authority (FCA), suggesting systemic lapses in how Coinbase communicates material information to investors.
Details of the Allegations Against Coinbase
Filed on May 22, 2025, the lawsuit accuses Coinbase of withholding information about a security breach in December of the previous year. According to the company’s disclosures, cybercriminals bribed several customer support employees to access a limited amount of user data.
Related: Who’s to Blame? Coinbase Faces Scrutiny Over Data Breach Response
However, Coinbase did not disclose the breach until May 15, 2025, causing COIN shares to fall 7.2% to $244. Coinbase estimates the financial impact of the incident, including remediation and potential user compensation, could range from $180 million to $400 million.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages,
the lawsuit states.
Regulatory Breaches in the UK
Beyond the data breach, the lawsuit also highlights an alleged violation of a 2020 agreement with the UK’s Financial Conduct Authority (FCA). In July 2024, the FCA fined Coinbase’s UK subsidiary, CB Payments Ltd., $4.5 million for allegedly providing services to 13,416 high-risk clients. The FCA’s announcement reportedly triggered a 5.52% drop in COIN stock.
According to Nessler, Coinbase failed to disclose this regulatory breach during its April 2021 IPO on Nasdaq. He claims the omission led to the company’s stock being “artificially inflated.” Had the information been made public earlier, Nessler argues, he would not have purchased shares at an overvalued price.
The class-action suit covers all investors who bought Coinbase stock between April 14, 2021, and May 14, 2025. Plaintiffs are seeking damages, legal costs, and a jury trial. In addition to Coinbase, the suit names CEO Brian Armstrong and CFO Alesia Haas as defendants.
Related: Coinbase & Gemini Users Beware: Massive Phishing Scam Uncovered
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