Coinbase faces a legal battle. Investor Brady Nessler filed a lawsuit on May 22 in the U.S. District Court for the Eastern District of Pennsylvania. He accuses the crypto exchange of hiding key facts. The complaint says Coinbase delayed its disclosure of a major data breach.
It asserts the company never made investors aware of its past experiences with the U.K. regulators. The information leak started in December 2024. Coinbase remained quiet until May 15, 2025. It came forward on the latter date and announced a small percentage of the users’ information had been stolen.
That consisted of usernames, addresses, bank information, and IDs. The leak fell short of 1% of users, but it surprised investors. The stock fell 7% and closed at $244. Nessler claims he lost significant amounts of money. He feels the company’s behavior misled shareholders.
Lawsuit targets Pre-IPO regulatory silence
His attorneys maintain that Coinbase’s delay in informing investors earlier put them at risk. They also refer to the company’s secrecy regarding its 2020 regulatory problems in the United Kingdom.
This was before the company went public in 2021. The suit demands a trial by a jury. The investor’s attorney didn’t specify how much they are seeking in damages. Coinbase has yet to issue a public response to the lawsuit. The legal filing comes during a tense week for the company.
Coinbase acknowledged it had been subject to a $20 million ransom demand. It then put a reward out for information regarding the attackers. The platform was announced after it had been added to the S&P 500.
Coinbase faces scrutiny from investors
That announcement probably helped ease the decline in the stock. The stock price now hovers around $263, a 7% increase since the announcement of the breach.
Anyone can sue in the United States, but the courts require solid proof. Plaintiffs need to establish they were harmed. Nessler feels he has. The lawsuit now awaits a judge and a jury.
Coinbase has some hard questions to answer. Shareholders demand answers. The timing of the announcement of the data breach creates concern.
Investors are also seeking transparency regarding the company’s past transactions with the regulators. Both parties’ witnesses will testify to the facts as the case proceeds. The result might inform the handling of disclosures by crypto companies in the future.
