Coinbase’s stock took a beating on Thursday, May 15, 2025, shedding 7.2% as the company grappled with fallout from a cyberattack and ongoing scrutiny by the Securities and Exchange Commission (SEC). Yet, some market analysts argue that the reaction might be a tad exaggerated.
The Hack and Its Fallout
Coinbase disclosed a breach on Thursday, revealing that customer data had been compromised through a social engineering scheme. This breach wasn’t your typical hack; it involved overseas customer support agents being bribed to leak sensitive information like names, addresses, and masked social security numbers. Though no passwords or private keys were accessed, the breach did result in scammers tricking users into transferring their crypto assets. In a bold move, Coinbase refused to pay the $20 million ransom demanded by the hackers. Instead, they assured customers of reimbursements and teamed up with law enforcement to track down the culprits. This incident comes on the heels of Coinbase’s involvement in a Supreme Court case defending user data against IRS access, highlighting the company’s ongoing battles over data privacy.
Barclays analysts were quick to remind investors that the breach did not signify a failure in blockchain security. “The market is likely pricing in too much risk,” one analyst noted, calling the reaction “somewhat overblown.”
The SEC Probe and Market Jitters
On the same day, Coinbase found itself under the SEC’s microscope. The commission is probing whether Coinbase inflated its user numbers during its 2021 IPO filing. The investigation focuses on the “100 million verified users” metric, which Coinbase hasn’t reported for over two years. Paul Grewal, Coinbase’s chief legal officer, suggested that the probe is unrelated to the company’s current operations, hinting it might wrap up swiftly.
Oppenheimer analysts echoed Barclays’ sentiments, viewing the stock’s dip as a “buying opportunity” and maintaining their outperform rating. They suggested that the breach was an isolated incident, unlikely to pose a broader systemic risk.
Market Context and Analyst Views
Notably, this double dose of bad news hit Coinbase just days after its stock soared upon being added to the S&P 500. The rapid rise may have left the shares vulnerable to a pullback. Barclays suggested that this, more than the breach or probe itself, might be driving investor reaction.
Mark Palmer from Benchmark downplayed the significance of both events. He described the breach as a targeted attack via customer support contractors, not a systemic failure. “The core systems remained intact,” Palmer emphasized. As for the SEC probe, Palmer dismissed it as “little more than noise,” given its focus on outdated metrics.
Looking Ahead
Despite the turbulence, there’s a silver lining. Oppenheimer analysts see the current share price weakness as a strategic entry point for investors. Palmer even raised his price target for Coinbase to $301, highlighting the company’s potential to thrive as institutional adoption grows and regulatory clarity improves. This optimism contrasts with recent challenges faced by other crypto entities, such as Movement Labs’ suspension of Rushi Manche amid a delisting and token-dumping scandal.
Yet, challenges remain. How Coinbase manages this crisis — and how long the market remembers it — could define the company’s near-term trajectory. As analysts debate the fallout, one thing is clear: the crypto giant’s resilience will be tested in the coming months.
Source
This article is based on: Market Reaction to Coinbase Hack ‘Overblown,’ Say Analysts as SEC Probe Sinks COIN
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
