SEC Reopens Coinbase’s 2021 “Verified User” Claim
Coinbase is back under the SEC’s microscope, this time over its 2021 claim of 100+ million verified users—a figure widely promoted in IPO materials and marketing at the time. The SEC’s probe, which began under the Biden administration and has continued under President Trump, is examining whether those claims were misleading.
Coinbase ceased using “verified users” as a reporting metric in 2022, pivoting instead to the more accurate monthly transacting users (MTU) figure. Still, the SEC remains focused on whether the original verified user count was inflated or presented without proper context. The company has enlisted powerhouse law firm Davis Polk & Wardwell to handle the legal response as the situation unfolds.
A Cyberattack Adds More Fuel to the Fire
As if the SEC wasn’t enough, Coinbase also disclosed a major cyberattack on May 15, resulting in a $20 million extortion attempt and the exposure of customer data. According to the company, overseas support agents were recruited by cybercriminals to leak data belonging to a small subset of customers. These rogue insiders abused their access to Coinbase’s customer support systems, enabling phishing and data theft.
Coinbase refused to pay the ransom and announced that it would reimburse affected users. The remediation could cost the company between $180 million and $400 million.
Investor Reaction: Stock Slumps on the News
The market didn’t take the double hit lightly. COIN stock fell 7% in after-hours trading, dropping to $244 following the news of both the investigation and the cyberattack. The timing couldn’t be worse: Coinbase is just days away from joining the S&P 500, a landmark move for the crypto industry. But these revelations cast a shadow over what was supposed to be a celebratory moment.
Coinbase’s Tightrope Walk
Despite dropping a 2023 enforcement action against Coinbase, the SEC under Trump has not backed off entirely. The reopened probe shows that legacy issues from the Biden-era regulatory playbook are still in motion. With the cyberattack adding financial strain and regulatory risk hanging overhead, Coinbase finds itself walking a tightrope—balancing public trust, legal battles, and shareholder confidence ahead of its historic S&P 500 inclusion.
