Coinbase Faces Class Action Lawsuit Over 'Omissions' That Affected Its Stock Price

Last week, a Coinbase investor filed a class action lawsuit in the US District Court for the Eastern District of Pennsylvania against Coinbase, CEO Brian Armstrong, and CFO Alesia Hass

Coinbase is facing a new class action lawsuit from an investor who claims that the crypto exchange’s “omissions” over the years led to significant losses for investors, affecting the company’s stock price.

The lawsuit, filed last week in the US District Court for the Eastern District of Pennsylvania, also includes Coinbase CEO Brian Armstrong and CFO Alesia Hass among the defendants.

According to the May 22 complaint, investor Brady Nessler, on behalf of persons or entities who purchased or otherwise acquired publicly traded Coinbase securities between April 14, 2021, and May 14, 2025, claims that the exchange has a long list of “wrongful acts and omissions.”

These acts, as described in the lawsuit, are said to have affected the company’s stock price and caused the Plaintiff and other Class members to suffer “significant losses and damages.”

Among the omissions, the lawsuit lists the company’s recent data breach and its failure to disclose that it breached an agreement with the UK’s Financial Conduct Authority (FCA).

In October 2020, the company’s UK subsidiary, Coinbase Payments (CBPL), signed a voluntary agreement to prevent onboarding clients considered “high risk” by the regulator and reduce potential criminal activity on the CBPL platform.

However, the lawsuit claims that the company made several “materially false and misleading” statements at the time that omitted that Coinbase Payments, Ltd. (CBPL) had been found guilty by the UK regulator of having “inadequate anti-money laundering focused systems to prevent high-risk individuals from using its platform, and that CBPL then breached the Agreement designed to address those deficiencies, creating legal exposure.”

As a result, the UK regulator imposed a financial penalty of £3.3 million on the company for the breaches.

The lawsuit further adds that the company’s common stock price fell by $13.52 per share, a 5.52% decline, when a Reuters article titled “Coinbase UK unit fined for breaching financial crime requirements” was published during market hours on July 25, 2024, announcing the FCA’s action and the company’s violation of the agreement.

The Class action suit also claims that the recent data breaches resulted in significant losses and damages for stockholders, highlighting the May 15 statement from the crypto exchange.

As reported by Bitcoinist, Brian Armstrong shared that threat actors bribed a handful of customer support contractors to gain access to Coinbase’s internal tools, resulting in the breach of names, email addresses, limited transaction records, and partial Social Security numbers of 1% of the exchange’s users.

The hackers then attempted to blackmail the exchange, demanding $20 million in Bitcoin (BTC) to return the sensitive customer data. However, Armstrong revealed that they refused to pay the ransom.

According to the lawsuit, following the news, the price of Coinbase’s common shares fell by $19.85 per share, a 7.2% decline, to close at $244 on May 15, 2025. Since then, multiple lawsuits have been filed against the crypto exchange, and the US Department of Justice has opened an investigation.

Plaintiff is seeking to “recover compensable damages caused by Defendants’ violations of the federal securities laws.”