Coinbase is facing a turbulent period. Its stock dropped sharply following revelations about a serious customer data breach and an ongoing investigation by the U.S. Securities and Exchange Commission (SEC), which is questioning the company’s previously reported user numbers.
According to Google Finance, Coinbase (COIN) shares fell by 7% after market close on May 15, ending the day at $244.
📊 SEC Investigates “Inflated” User Numbers
The SEC probe focuses on Coinbase’s 2021 claim that it had “over 100 million verified users,” a figure cited in marketing materials and IPO filings.
Coinbase has since stopped reporting this metric in 2022, replacing it with the more transparent figure of monthly transacting users.
Coinbase’s Chief Legal Officer Paul Grewal told :
“This is an investigation concerning data we stopped reporting two and a half years ago. Still, we remain committed to working with the SEC to bring this matter to a close.”
🔍 Investigation Continues Despite Dropped Lawsuit
Interestingly, the investigation continues even though the SEC dropped its 2023 lawsuit against Coinbase. The probe, which began during the Biden administration, has carried over into the Trump era.
To manage its legal response, Coinbase has hired the respected law firm Davis Polk & Wardwell.
🔐 Cyberattack and Extortion Attempt Shake Investor Confidence
Coinbase also announced that it had been targeted by an extortion attempt. Hackers demanded $20 million in exchange for not leaking customer data.
The breach reportedly involved foreign support staff, who misused their access to steal account information from a small group of users.
Coinbase refused to pay the ransom but pledged to compensate affected customers, estimating the costs of restitution and security measures at between $180 million and $400 million.
📉 Double Blow Hits Investors
The company is now dealing with a double blow: shaken investor confidence due to scrutinized past user data and renewed concerns over platform security. The combined impact of both events triggered a strong reaction on the stock market, sending Coinbase shares downward.
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