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Coinbase and two executives face a new proposed class-action lawsuit alleging losses due to a stock price drop following disclosures of a data breach and a UK regulatory violation. The lawsuit, filed by investor Brady Nessler in Pennsylvania federal court, claims that the May 15th disclosure of a data breach, resulting in a potential $400 million damages bill and a $20 million extortion attempt, caused a significant stock decline. While the stock initially recovered, it subsequently fell.
Nessler contends that the breach disclosure caused a 7.2% drop in Coinbase (COIN) stock on May 15th, closing at $244, despite a later rebound. The suit also alleges that Coinbase’s failure to disclose a violation of a UK Financial Conduct Authority (FCA) agreement further impacted the stock price. The FCA fined Coinbase’s UK arm $4.5 million in July 2024 for onboarding high-risk customers, contravening a 2020 agreement. Nessler claims this undisclosed violation artificially inflated the stock price before Coinbase’s 2021 Nasdaq listing.
The lawsuit argues that this omission, along with the subsequent breach disclosure, misled investors. Nessler claims that had she known about these issues, she would not have purchased the stock at what she considers artificially inflated prices. The lawsuit seeks damages and a jury trial on behalf of anyone who bought Coinbase stock between April 14, 2021, and May 14, 2025. Coinbase CEO Brian Armstrong and CFO Alesia Haas are also named as defendants.
This is reportedly the first lawsuit to directly address damages stemming from the stock price drop following the breach disclosure. Other recent class-action lawsuits against Coinbase focus on the company’s handling of the incident and failure to protect user data. A separate lawsuit filed in Illinois on May 13th alleges Coinbase’s failure to adequately notify users about the collection and use of their biometric data. Coinbase has yet to comment on the Pennsylvania lawsuit. The class action follows a period of significant volatility for Coinbase stock, despite overall gains for the year.
