Public Keys: Can’t Hold Coinbase Back, Nasdaq Initiation for eToro and Galaxy Digital

Coinbase can't shake the SEC's probe into its user numbers. Meanwhile, eToro and Galaxy Digital make their Nasdaq debuts.

Public Keys is a weekly roundup from Decrypt that tracks the key publicly traded crypto companies. This week:

Coinbase flagged a $400 million cybersecurity breach this week—one of the biggest in the company’s history. The most troubling aspect is that the exploit arose because an overseas contractor was bribed to steal customer data.

In a video posted online, CEO Brian Armstrong said that criminals were able to gain access to sensitive user data, including names, addresses, partial bank details, and ID documents. But less than 1% of customers were affected, he added.

The criminals intended to blackmail Coinbase into paying $20 million to stop the data being released. The company refused and has since set up a $20 million bounty for information leading to the parties responsible.

To make matters worse, the company is also dealing with a probe from the U.S. Securities and Exchange Commission over its user numbers.

The news first appeared in The New York Times. Four unnamed sources told Times reporters that the inquiry began last year during President Joe Biden’s administration and is ongoing—despite the fact that the SEC has dropped its lawsuit against the exchange.

Coinbase claimed in its original public offering document in 2021 to have more than 100 million “verified users.” But by 2023, the company had stopped using that language in its marketing material.

But hey, choppy means ups and downs right? Despite a few bumps, the company recently joined the S&P 500 and is ending the week trading for $266.78. That’s an 18% gain compared to this time last week.

Investment and financial services firm Galaxy Digital and trading platform eToro have joined the Nasdaq, under the GLXY and ETOR tickers, respectively.

The paths the companies took to get there couldn’t be more different. 

Galaxy Digital has been listed on the Toronto Stock Exchange since 2018. Which is why despite the fact that it’s only just hit the Nasdaq as of this morning—CEO Mike Novogratz rang the opening bell—the company has been reporting its earnings for years.

After the company’s big debut, Novogratz told CNBC that the process the company’s gone through to redomicile to the U.S. was “un-American, unfair, infuriating.”

During the same interview, the crypto CEO alluded to eToro having faced a tough road to a U.S. IPO—but was light on the details. 

It’s true that eToro tried and failed to go public in the U.S. via a SPAC deal in 2021.

The few details that have come out about its successful IPO round came from Israeli tech site Calcalist, which said the deal’s underwriters closed the book on orders because the round was 10x oversubscribed.

Call us naive, but that doesn’t sound too unfair or infuriating. The company has soared to a $5 billion market cap after its debut. 

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