Coinbase is under fresh scrutiny as the U.S. Securities and Exchange Commission investigates whether the crypto exchange inflated its verified user numbers. At the heart of the probe is whether Coinbase’s earlier metric included anyone who just verified an email or phone number, making it potentially misleading. This figure was prominently featured in the company’s filings ahead of its 2021 IPO.
The SEC’s interest highlights ongoing tensions between regulators and crypto platforms over transparency and accurate reporting. Although Coinbase no longer uses the “verified user” metric and focuses instead on active monthly users, this retrospective examination could have serious consequences, especially given the company’s public listing and past investor communications.
Complicating matters, Coinbase recently disclosed a troubling data breach. Hackers allegedly bribed some support staff to access personal data from nearly 100,000 users. The attackers demanded $20 million in ransom, which Coinbase refused to pay. The company says it’s cooperating with law enforcement and tightening internal security protocols.
These issues have shaken investor confidence, with Coinbase shares falling over 7% after the announcements. Still, the crypto sector remains resilient. Despite regulatory and security concerns, major digital assets have continued to gain in value, reflecting ongoing optimism in the market’s long-term prospects.
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