Coinbase is facing significant legal challenges stemming from a data breach in May 2025 and a regulatory fine by the UK’s Financial Conduct Authority (FCA). This has caused volatility in Coinbase stock and raised questions about the company’s security protocols, compliance with regulations, and broader industry standards. Investor concerns regarding security have driven significant stock declines following the breach revelation. The company also incurred a $4.5 million fine from the FCA for previous regulatory violations. A lawsuit filed by investor Brady Nessler adds further pressure to Coinbase. The lawsuits highlight the ongoing challenges for Coinbase in achieving and maintaining regulatory compliance, impacting investor confidence and potentially influencing broader industry regulations. Past legal issues regarding privacy violations, although later dismissed, illustrate a recurring challenge for the company, potentially shaping future responses from the firm and market response.