Coinbase confronts multiple class action lawsuits due to alleged security breaches.
In the rapidly evolving world of cryptocurrency, one of the leading U.S.-based exchanges, Coinbase, finds itself under intense legal scrutiny. The ongoing legal battle underscores the growing scrutiny of cryptocurrency exchanges as they navigate the complexities of the industry.
The saga began in December 2024, when a data breach at Coinbase went unnoticed. The breach continued until May 2025, when the exchange received a credible ransom note. This prolonged breach affected 69,461 users, leading to six class action lawsuits being filed against Coinbase between May 15 and May 16, 2025.
The compromised data cannot be recovered, posing substantial, immediate, and ongoing threats for affected users. The lawsuits accuse Coinbase of failing to maintain stringent security protocols, leaving users vulnerable to identity theft and financial fraud.
Hackers bribed overseas support agents to steal personal and financial data from Coinbase users. In response, Coinbase offered a $20 million bounty for information leading to the culprits' arrest. However, the exchange refused to pay the $20 million ransom demanded by the hackers.
The estimated expenses for reimbursement range from $180 million to $400 million, according to a filing with the U.S. Securities and Exchange Commission. Users on social media platforms have expressed frustration and criticism towards Coinbase, stating that the $20M bounty is insufficient compared to the estimated expenses for reimbursement.
One lawsuit in California demands that Coinbase purge sensitive user data and hire third-party auditors to test its security systems. Coinbase has not directly commented on the latest lawsuits but pointed to a blog post outlining its response to the breach.
The ongoing legal battle adds to the legal challenges Coinbase faced in 2023 over security lapses. Notably, the SEC under new leadership appears to have eased its aggressive stance, including withdrawing lawsuits against some crypto firms like Coinbase, suggesting fewer or resolved cases by 2025.
The stock price of Coinbase dipped 3.2% in after-hours trading on May 27, 2025. For affected users, the compromised data poses significant risks, and Coinbase has plans to reimburse users tricked into sending crypto to phishing scammers.
The ongoing legal battle can be found in the article titled "Is Coinbase Safe & Trustworthy in 2025?" As the case unfolds, the future of Coinbase and its commitment to security and user protection remain under close examination.
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