Coinbase Global, Inc. and its executives face a class action lawsuit alleging they concealed compliance failures and data security risks that caused shareholder losses, according to a complaint filed Thursday in Pennsylvania federal court.
Class Action Claims Coinbase Misled Investors
Investor Brady Nessler filed the suit in the U.S. District Court for the Eastern District of Pennsylvania on behalf of purchasers of Coinbase securities between April 2021 and May 2025. The complaint accuses the crypto exchange of violating federal securities laws by omitting material risks about its U.K. subsidiary’s anti-money laundering (AML) control breaches and cybersecurity vulnerabilities.
The lawsuit centers on Coinbase’s subsidiary CB Payments Ltd. (CBPL), the class action states that U.K. regulators fined £3.5 million ($4.5 million) in July 2024 for repeatedly violating a 2020 agreement with the Financial Conduct Authority (FCA). The FCA alleged CBPL onboarded 13,416 high-risk customers between 2020 and 2023, enabling $226 million in crypto transactions despite known compliance gaps.
Coinbase did not disclose these breaches in U.S. Securities and Exchange Commission (SEC) filings, the suit claims. Separately, the complaint cites a May 2025 data breach involving overseas contractors allegedly bribed to steal customer information, including names and partial Social Security numbers. Coinbase confirmed the breach in an SEC filing but stated it refused a $20 million ransom demand.
The lawsuit says Coinbase’s stock fell 5.5% on July 25, 2024, after the FCA penalty announcement, and 7.2% on May 15, 2025, following the breach disclosure, erasing billions in market value. The lawsuit seeks damages for investors who bought shares at “artificially inflated prices.”
The plaintiffs demand a jury trial and class certification. Legal experts say the case may hinge on whether Coinbase’s risk disclosures adequately addressed known operational flaws. In the litigation, both Coinbase’s Alesia Haas, chief financial officer, and Brian Armstrong, the chief executive officer, of the enterprise are designated defendants. Legal counsel for Nessler consists of the law firms Edelson Lechtzin LLP and Herman Jones LLP.
