The world’s largest publicly listed crypto exchange, Coinbase, has been rocked by a damaging cyberattack and continued investigation from its SEC lawsuit just days before its S&P 500 debut. The back-to-back setbacks have taken a massive toll on the Coinbase stock price, as it dropped over 7% in one trading session on Thursday.
Coinbase Stock Takes Massive Hit
The one-two punch of the Coinbase cyber attack and the SEC investigation sent COIN shares tumbling, even as the exchange is poised to join the S&P 500 index next week. This milestone was expected to bolster credibility, but recent events have overshadowed the narrative.
On Wednesday, the Coinbase stock prices lost over 9% within 90 minutes of the opening bell. Through the session, they gradually recovered, only to drop again and close at $244.4, almost $19 or 7.2% down from the previous close.
Cybersecurity analysts warn that crypto platforms, especially U.S. leaders like Coinbase, are increasingly becoming top targets. A report from Chainalysis estimates that over $2.2 billion was stolen from crypto firms in 2024 alone.
Coinbase Cyber Attack Hits Ahead of S&P 500 Entry
Coinbase confirmed a cyber attack that exposed customer data on Thursday and led to a ransom demand of $20 million, just days before the company is scheduled to join the S&P 500 index. The breach involved rogue overseas contractors bribed by hackers to access internal systems.
CEO Brian Armstrong addressed the incident on X, revealing that hackers bribed Coinbase’s overseas support staff for access to internal tools. A small group of insiders gave in, leaking sensitive customer data like names, email addresses, birthdates, and home addresses.
Armstrong said,
“The attackers’ intent was to use the user’s personal information clandestinely, and to social engineer unique scams impersonating Coinbase support,”
Though passwords and crypto wallets were not compromised, attackers gained access to names, contact details, masked bank info, government ID images, and partial Social Security numbers.
Coinbase fired all employees involved and launched a $20 million bounty for information leading to the attackers’ arrest, vowing not to negotiate with the criminals. The CEO added that,
“Any customers that were socially engineered as a result of this incident, we’re going to reimburse them.”
Estimated costs from the incident may reach $400 million, covering customer reimbursements, legal risks, and tech remediation.
The hack had a direct impact on the Coinbase stock. But this was not the only mishap for Coinbase in the last 12 hours.
SEC Investigates Coinbase Over Inflated User Claims
Simultaneously, the SEC is investigating Coinbase over allegedly misleading user numbers in past disclosures. The probe, started under the Biden administration and continued under the Trump-era SEC, targets the company’s previous reporting of “verified users” topping 100 million.
Coinbase’s legal team argues the metric, discontinued over two years ago, was always disclosed as including anyone who verified an email or phone number. The company now focuses on “monthly transacting users” as a more accurate measure.
Chief Legal Officer Paul Grewal said, “This investigation should not continue,” but confirmed that Coinbase is cooperating with the SEC to resolve the issue.
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