Coinbase Breach highlights the dangers of public cipher lists

The sharp decline in stocks that United Health has experienced over the past month has spoken a lot about the risks companies face if they decide to go public. With Crypto, the results can be even worse.

The numerous data breaches, security risks and regulatory uncertainties surrounding crypto have heightened interests among companies considering public recruitment. Beincrypto discussed these important trade-offs with Ar.io, Naoris Protocol, Galxe, and Cyvers.

Market sentiment drives a sharp decline in two major companies

A major crypto exchange with the healthcare giant revealed a series of unfortunate events and their stocks fell this week after sought for investor trust.

UnitedHealthCare shares fell 16.5% on Thursday amid ongoing Justice Department Medicare fraud investigation and the CEO’s recent resignation.

That same day, a cybersecurity attack on Coinbase damaged some customers’ account data. In addition to the company’s expected loss of between $18 billion and $400 million, the incident has sparked widespread security concerns among its user base.

The company’s market perception declined accordingly, with its inventory falling 7% lower by the end of the day.

These cases highlight how strongly market sentiment and company-specific news can affect public companies, and have a potentially significant impact on people in the crypto industry.

Are publicly available crypto companies inherently vulnerable?

Exchanges of crypto companies, particularly Coinbase, have historically been vulnerable to user-end security breaches, which could result in loss of data and funds. Coinbase’s well-known profile and the large amount it manages become a major target for cybercriminals.

“Cybercriminals recognize that billions of dollars are stolen every year,” David Carvalho, founder and CEO of Naoris Protocol, told Beincrypto.

The move to a company where Coinbase was published in April 2021 expanded its exposure to a variety of risks, thanks to an increased appeal to hackers seeking to release a statement.

“Being publicly opens up will target any company a greater target for burglars, but it is probably a big problem for crypto companies as the crypto industry has the best in the world.

Exchanges that store all assets on a single platform make them particularly vulnerable to exploitation.

Cryptocentralization vulnerability

Data from Chain Dialysis shows that Cryptocurrency Fund losses in 2025 already outweighed the previous year’s total losses. Due to the centralized structure, centralized exchange is the main target.

Given this reality, crypto companies spend billions of dollars on security to minimize security threats.

“By default, Web3 inherits centralized vulnerabilities in Web2, so distributed security is the only answer. You need to upgrade your systems urgently to mitigate these growing risks,” Carvalho said.

But sometimes security is not enough for precautions. As hacking becomes more frequent, so does hackers’ refinement and professionalism.

“Coinbase has shown maturity in the region where crypto space is most vulnerable: security, compliance and user trust. But as one of the world’s biggest centralized exchanges, it has always been a major target for burglars and hackers.

However, companies can better manage their financial exposure to market sentiment. More protection measures are available to protect stock performance.

Is the risk worth it for a Crypto company?

Crypto companies considering entering the open market following Coinbase’s lead should carefully assess the inherent risks of the industry. Frequent data breaches and security threats pose major challenges for published entities.

Coinbase has seen great growth in the stock market after being included in the S&P 500, but the news of a data breach has caused a significant instant dip.

The rapid negative response to Coinbase’s data breaches demonstrates how operational vulnerabilities directly affect market value. The company’s stock price recovered after transparent communication and urgent risk mitigation efforts.

However, it shows that Crypto is at risk and the broader impact of IPOs can become a dangerous mix.

Therefore, while it is open, crypto companies must maintain strict security within an industry characterized by unclear regulations.

“Being public can increase the reliability and access to capital for crypto companies, but only if security attitudes and compliance frameworks are solid. In today’s changing regulatory environment and sophisticated threat face, continued security audits, penetration testing, realistic threat interception, and strict CEO Deddy Prevention said.

If they don’t, the outcome could be irreversible, he warned.

“These high standards are important because regulations are behind, otherwise there is risk to assets, traders and brands,” concluded Lavid.

Those who go down this path must learn to step in with caution.