Significant Cybersecurity Incident Causes Coinbase Shares to Plunge by 7%

On May 15, 2025, investors in Coinbase Global, Inc. (NASDAQ: COIN) were confronted with a troubling announcement as the company revealed that it had experienced a significant cybersecurity incident. Immediately following the disclosure, the price of their shares dropped by approximately 7%. This incident has prompted serious concerns regarding the company's internal security controls and the overall reliability of its disclosure processes.

Investigation Launched by Hagens Berman

In the wake of this revelation, the law firm Hagens Berman has initiated an investigation into possible violations of securities laws. They are particularly interested in hearing from Coinbase investors who have sustained notable financial losses as a result of the incident. Additionally, individuals with knowledge that could assist the investigation are encouraged to reach out to the firm's attorneys.

For more details, visit Hagens Berman’s website or contact them directly.

Understanding the Cybersecurity Incident

The investigation underscores concerns regarding the integrity of Coinbase's assertions about its security measures. Coinbase has previously insisted that it maintains stringent administrative, technical, and physical security protocols along with a robust information security program. However, the announcement on May 15 raised doubts about these claims, particularly following reports of a threat actor successfully infiltrating the company’s systems and accessing sensitive information belonging to nearly 70,000 customers.

According to the company, an unknown individual sent an email claiming to have possession of customer account details and internal documentation. It is alleged that this hacker acquired the data by bribing employees or contractors to extract it from Coinbase’s infrastructure. In an alarming turn of events, Coinbase acknowledged that they had previously detected unauthorized access but did not adequately address the security vulnerabilities. The estimated costs for remediation and customer reimbursements associated with the breach could reach a staggering $400 million.

Competitive Landscape and Security Concerns

Further complicating matters, on May 18, news outlets like The Business Times reported that Coinbase's competitors—Binance and Kraken—had also faced similar hacking attempts but were able to protect their customers' data effectively. This revelation intensified scrutiny of Coinbase's security protocols, especially given that those rival exchanges were reportedly aware of imminent threats targeting significant Coinbase holders. At least one exchange had previously informed Coinbase’s security team multiple times about these hacking efforts.

Reed Kathrein, the leading partner at Hagens Berman, expressed significant concern, stating, “We are investigating whether Coinbase may have misrepresented its security controls and delayed disclosing this serious cybersecurity incident.” This examination of the potential misrepresentation of security controls has led to increasing frustration and anxiety among investors who had believed in the company’s assurances regarding its security measures.

The Path Forward for Affected Investors

Investors affected by the incident are encouraged to share their experiences and losses. Hagens Berman's investigation seeks to uncover the truth behind the security weaknesses and the alleged delays in disclosure by Coinbase. Whistleblowers with knowledge of any non-public details about Coinbase's operations may also have the opportunity to provide crucial information that can benefit the investigation, with possible rewards from the SEC for their cooperation.

About Hagens Berman

Hagens Berman is a prominent plaintiffs' rights law firm specializing in corporate accountability. Over the years, they have successfully represented a diverse range of clients, including investors, whistleblowers, and consumers, achieving substantial results in various legal battles regarding corporate negligence. With a track record of securing over $2.9 billion in settlements and judgments, the firm has made significant strides in advocating for those harmed by corporate misconduct. For further information and updates, you can follow the firm on their social media platforms or visit their website at hbsslaw.com.