- Coinbase stock fell 7.2% after a cyberattack exposed user data days before S&P 500 inclusion.
- Hackers used corrupt contractors to breach Coinbase, stealing names, emails, and partial SSNs.
- SEC reopens probe into Coinbase’s inflated “verified user” metrics, intensifying regulatory pressure.
Coinbase’s stock price plunged on Thursday following the company’s announcement about a damaging cyberattack and an SEC investigation restart. The cryptocurrency exchange faces a double blow because it is preparing to join the S&P 500 next week. COIN stock dropped over 7% in a single session, increasing new worries regarding operational stability and regulatory scrutiny.
The sudden decline comes after reports revealed that hackers accessed Coinbase’s internal networks via compromised foreign contractors. Furthermore, the U.S. The Securities and Exchange Commission is examining the company’s past user data disclosures, which is intensifying investor concerns.
Cyberattack Compromises Customer Data Days Before S&P 500 Entry
Coinbase announced on Thursday that hackers paid corrupt overseas contractors to gain entry to their internal systems. The breach resulted in hackers obtaining customer personal information including full names and email addresses as well as residential addresses and parts of Social Security numbers.
Despite the $20 million ransom demand from the attackers, Coinbase chose not to enter into negotiations. The firm reacted by dismissing the employees connected and proposing a $20 million reward for information that would result in the arrest of the attackers. CEO Brian Armstrong mentioned that users impacted by impersonation scams related to the breach would receive compensation.
While crypto wallets and passwords stayed protected, cybersecurity specialists cautioned that the stolen personal data might still be exploited in specific social engineering attacks. The projected expenses from the fallout may amount to $400 million, covering reimbursement costs, legal charges, and technical enhancements.
SEC Investigates Claims of Deceptive User Metrics
In addition to the cyberattack, Coinbase faces increased examination from the SEC concerning its previous reporting methods. The regulatory authority is looking into allegations that the firm inflated its user count by counting anyone who had validated an email or phone number.
This user count metric, referred to as “verified users,” had previously topped 100 million but was discontinued over two years ago. The primary engagement indicator for Coinbase is their monthly transacting user count.
The Chief Legal Officer of Coinbase Paul Grewal affirmed the company’s cooperation with the SEC. He emphasized that the metric in question was always disclosed accurately and called for the investigation to end.
Stock Performance Weakened Ahead of Market Inclusion
Despite anticipation surrounding its upcoming S&P 500 listing, Coinbase’s stock performance has been negatively affected by the recent setbacks. On Wednesday, the company’s share price dropped more than 9% within 90 minutes of market opening.
After a brief recovery during the session, the stock finished at $244.4 which represented a 7.2% decrease from its previous closing value. Volatile stock performance continues while investors evaluate the lasting effects of the security breach alongside regulatory changes. The company’s anticipated market position milestone became overshadowed by the events that transpired.
