SEC’s Coinbase Probe Heats Up: ‘Verified Users’ Under Scrutiny

SEC Probes Coinbase’s User Claims Amid Regulatory Shift

The SEC is still looking into Coinbase’s past statements about its user base, despite a general easing of crypto enforcement under President Trump, as reported by The New York Times.

Four sources say the SEC is questioning Coinbase’s claim of over 100 million “verified users,” a key figure in its 2021 IPO filing. Regulators suspect this number might have misled investors by inflating the company’s actual user count.Coinbase stopped using this metric in 2023, admitting it could have overestimated unique users due to multiple account registrations.

Paul Grewal,Coinbase’s chief legal officer,calls it a leftover investigation from the Biden era. The company, now working with davis Polk & Wardwell, believes the probe should be closed. The inquiry checks if the company misrepresented its user base size.

Despite the new crypto-kind SEC Chair Paul Atkins, some oversight continues. Coinbase was added to the S&P 500 this week, boosting its institutional standing.

Coinbase CEO Brian Armstrong’s visibility in Washington has grown. He attended a White House crypto summit in March, sitting near President Trump. However, the company disclosed a data breach this week, potentially costing up to $400 million.

Key points:

• SEC investigates Coinbase’s user base claims.
• Company admits to potential overstatement of unique users.
• Coinbase added to S&P 500, enhancing its clout.
• Data breach could cost up to $400 million.