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BlockTower founder accuses Coinbase over $25 million loss and alleged $1 billion hack cover-up
The founder of investment firm BlockTower Capital has accused Coinbase of losing $25 million of his firm's funds and concealing a series of hacks totaling more than $1 billion. He said at least 12 companies were affected by the alleged incidents.
Ari Paul claims Coinbase has yet to return the funds BlockTower lost. However, he did not disclose details of the alleged attacks, citing several ongoing legal proceedings.
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BlockTower Capital invests in both crypto and traditional assets. The company was founded in 2017 by Paul and former Goldman Sachs employee Matthew Goetz.
Paul alleges series of undisclosed hacks
The accusations emerged in response to a discussion on X involving prominent crypto investor Cobie. A user known as Kuno claimed he had repeatedly contacted Coinbase over $1.2 million that he alleged the exchange had misappropriated.
Cobie questioned his account of events and said the story appeared to be a scam post designed to attract attention. Paul then joined the discussion and described his own dispute with Coinbase.
According to the BlockTower founder, his company lost $25 million and Coinbase's alleged problems extend far beyond a single case. He claimed there had been "large-scale and repeated hacks" totaling more than $1 billion and alleged that the exchange had concealed information about them.
Paul has not publicly provided evidence supporting the amount he cited. Coinbase has also yet to comment on the allegations, meaning the claims about the losses and concealment of attacks remain allegations made by the BlockTower founder.
Coinbase previously faced lawsuit over stolen funds
In May, Coinbase was sued over part of the cryptocurrency linked to a $55 million attack in August 2024. The plaintiff alleged that the exchange retained some of the frozen assets stolen in the hack.
According to the victim, he clicked on a malicious link impersonating the DeFi position management service DeFiSaver. As a result, the user unknowingly granted permission to a smart contract that allowed attackers to gain control of his crypto assets.
Paul's allegations come amid a series of other incidents that have renewed attention on the security of major cryptocurrency and fintech platforms. The risks are not limited to the direct theft of funds: Revolut faced the consequences of compromised customer information in September.
On September 14, hackers began publishing customer documents and photos, and demanded a ransom from the company. The attackers threatened to release new user data every day until the fintech company met their demands.
Earlier, we reported that the market capitalization of a token promoted alongside leaked GTA VI materials surged 5,800%. The asset rose sharply following the spread of the stolen content.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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