Coinbase Shares Drop 8% After Cyber Attack, SEC Investigation

Coinbase's stock fell sharply following two major developments: a cyber attack in which hackers stole sensitive customer data and demanded a $20 million ransom, and reports of an ongoing SEC investigation into past user data reporting. Coinbase confirmed that less than 1% of monthly transacting users were affected and that no passwords or private wallet codes were compromised, opting to offer a $20 million bounty to catch the attackers instead of paying the ransom. The company estimated the total cost of addressing the incident could range from $180 million to $400 million, causing market concerns over short-term financial impacts despite Coinbase's recent gains and inclusion in the S&P 500 index. Coinbase's chief legal officer described the SEC investigation as a legacy issue from a previous administration, related to a metric no longer reported. Despite the setbacks, Coinbase's financial performance remains strong, with revenue growth and positive analyst outlooks, although the stock remains volatile amid these regulatory and security challenges.