Coinbase, one of the world’s leading cryptocurrency exchanges, is currently under intense scrutiny following a serious data breach and an ongoing class-action lawsuit concerning biometric privacy violations. These developments have raised urgent concerns around user data protection and platform transparency, especially in light of global privacy regulations like the EU’s GDPR.
Data Breach Puts Millions at Risk
On May 15, 2025, Coinbase confirmed that a sophisticated cyberattack compromised sensitive user data, including names, birth dates, and partial Social Security numbers. According to the company, the attack involved bribed customer support contractors in overseas locations, who granted unauthorized access to internal systems. Although passwords and funds remained untouched, the attackers demanded a ransom of $20 million. Coinbase declined to pay and instead offered a $20 million reward for information leading to the hackers’ arrest.
The potential financial impact ranges between $180 million and $400 million, as Coinbase has pledged full reimbursement for affected users. The breach highlights vulnerabilities even in leading exchanges and signals the need for stronger internal access controls and third-party oversight.
Biometric Lawsuit and GDPR-Like Implications
Simultaneously, Coinbase faces a class-action lawsuit in Illinois for allegedly violating the Biometric Information Privacy Act (BIPA). Plaintiffs claim the platform collected biometric identifiers, such as facial geometry, without informed user consent and shared this data with third-party verification providers, including Solaris, Jumio, and Onfido. If proven, these actions could result in penalties of up to $5,000 per user per violation.
As if that were not enough, Coinbase allegedly transmitted this biometric data to vendors like Solaris and Jumio without the data subjects’ consent. The EU’s GDPR Enforcement Tracker comes to mind here; organizations across Europe face steep fines daily for similar violations, particularly around the unauthorized collection and sharing of personal data.
What This Means for Crypto Users
These legal and reputational setbacks come at a time when user trust is critical for the growth of Web3 and decentralized finance. Coinbase’s case reinforces the importance of regulatory compliance, ethical data collection practices, and user-informed consent. For individual users, this is a reminder to carefully evaluate the security posture of crypto platforms and consider decentralized, non-custodial wallets for better control over personal data and funds.
As cryptocurrency adoption expands, platforms like Coinbase must balance innovation with user protection. Regulatory bodies around the world are closely watching this case, which may serve as a precedent for future privacy enforcement in the blockchain sector. With data breaches and privacy violations becoming more frequent, crypto platforms need to prioritize transparency, security, and user rights to maintain trust in the ecosystem.
