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Coinbase is reeling from an internal data breach that could cost up to $400 million, just days before it’s set to join the S&P 500 index.
The company disclosed that external actors bribed ”contractors or employees” to gain access to internal systems and sensitive customer data. The attackers then attempted to extort $20 million from the exchange, threatening to leak the compromised information.
Coinbase did not pay the ransom, and said less than 1% of its monthly transacting users’ data was affected by the attack. Coinbase has also fired the contractors involved in the breach.
Coinbase said it will reimburse users who lost funds, a move expected to cost between $180 million and $400 million, according to a recent Securities and Exchange Commission (SEC) filing.
Coinbase (COIN) shares plunged 7% to $244.44 on Thursday, amid growing concerns over the breach and a new SEC investigation into whether the firm misled investors ahead of its 2021 IPO.
The exchange, set to join the S&P 500 index on May 19, was the most impersonated crypto brand by scammers in 2024, according to data from Mailsuite.
https://t.co/evpIBMFvRW pic.twitter.com/f6UPdkL5R0
— Brian Armstrong (@brian_armstrong) May 15, 2025
SEC Investigates Coinbase For Potentially Misleading Investors Ahead Of 2021 IPO
Adding to the crypto exchange’s woes was a New York Times report that the SEC launched an investigation into whether it had misled investors and inflated its user numbers ahead of its public debut in 2021.
The leading US crypto exchange downplayed the investigation from the financial regulator, calling the SEC’s probe “a hold-over investigation” from the prior anti-crypto administration.
The SEC zoned in on Coinbase’s claim of “100+ million verified users” that appeared in its marketing and IPO documentation in 2021. Coinbase stopped reporting this metric in 2022, a filing with the SEC shows.
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