According to a New York Times report , the U.S. Securities and Exchange Commission (SEC) is investigating whether the Coinbase (Nasdaq: COIN) crypto exchange overstated its user numbers in past filings and public statements.
The inquiry — which began under the Biden administration — is focused on the company's "verified user" metric, which Coinbase once claimed exceeded 100 million but later stopped reporting.
The investigation continues despite the SEC dropping its 2023 lawsuit against Coinbase after President Donald Trump took office.
"This is a hold-over investigation from the prior administration about a metric we stopped reporting two and a half years ago, which was fully disclosed to the public. We explained that the verified users metric includes anyone who verified their email address or phone number with us, so it may overstate the number of unique customers. We also disclosed – and continue to disclose – the more relevant metric of 'monthly transacting users' – the number of people who use our platform in a given month," Paul Grewal, Coinbase's chief legal officer, said in a statement.
"While we strongly believe this investigation should not continue, we remain committed to working with the SEC to bring this matter to a close."
SEC's crusade continues
The SEC's interest centers on whether the "verified user" count may have misled investors. In earlier filings, Coinbase had warned the figure could "overstate the number of unique customers" because some users might create multiple accounts.
Still, executives like CEO Brian Armstrong touted the 100+ million figure in interviews and social media posts. The metric appeared in its 2021 IPO prospectus but was removed in 2023, with the company stating it "no longer provides valuable insight into our business performance."
Coinbase has been in touch with the SEC over the course of this year and has hired the law firm Davis Polk & Wardwell for assistance, the report mentions.
The ongoing investigation underlines the fact that the SEC has not yet abandoned its crusade against the crypto industry even after the agency has disbanded its specialized crypto unit.
This renewed attention comes just as Coinbase revealed a $400 million potential exposure due to attackers getting access to customer data through "rogue" support agents, while the exchange prepares for its S&P 500 debut . While the SEC has dropped several crypto-related cases in 2025, enforcement actions around corporate disclosures remain active.
Coinbase is the largest crypto exchange in the U.S. that is worth more than $60 billion.
At press time, the COIN stock was trading at $246.39, down 6.43% since the last day's close.
