Coinbase’s Surge in Government Requests
In a significant development for the cryptocurrency exchange industry, Coinbase reported receiving an unprecedented 12,716 requests from government and law enforcement agencies for customer information in 2025. This figure represents a 19% increase compared to the previous year and stands as the highest number of requests ever recorded by Coinbase. Notably, over half of these requests—53%—came from international jurisdictions, a record high for the exchange. France led the international charge with a staggering 111% increase in demand for customer data, becoming the predominant source of requests outside the United States.
Expansion and Regulatory Scrutiny
Over the past year, Coinbase has expanded its operations to over 100 countries, which is likely influencing the rising number of information requests. This expansion occurs amid an environment of intensified regulatory scrutiny, primarily due to severe past compliance failures in Europe and a substantial cybersecurity breach that occurred earlier in the year.
The annual Transparency Report, released by Coinbase’s Chief Legal Officer, Paul Grewal, emphasizes the mounting global pressure on cryptocurrency platforms. These platforms face the challenge of meeting legal obligations while attempting to safeguard user privacy.
Geographical Distribution of Requests
In terms of geographical distribution of requests, the United States continues to be the leading source, with Germany, the United Kingdom, France, Spain, and Australia following closely behind, collectively accounting for about 80% of global law enforcement requests. While France experienced an exceptional 111% jump, the UK and Spain also saw notable increases of 16% and 27%, respectively. Conversely, some countries like South Korea saw a dramatic decrease in requests, reporting a 67% drop. Other nations, including Moldova and Brazil, experienced increases of 5.7 and 2.7 times, respectively, while Australia’s figures remained relatively stable with a mere 1% rise.
Reputation Challenges and Compliance Issues
As requests soar, Coinbase grapples with a damaged reputation following recent fines and internal security failures. In November, the company’s European division faced a €21.5 million fine from the Irish Central Bank due to coding mistakes that left a significant portion of transactions unscreened for money laundering between 2021 and 2022. These errors affected a notable 31% of all transactions, necessitating a review of 185,000 transactions and the filing of numerous suspicious transaction reports. Additionally, Coinbase’s UK branch was fined £3.5 million in 2024 for inadequately managing high-risk customer onboarding, enabling nearly $226 million in transfers without proper vetting.
The exchange’s recent cybersecurity breach, which was not initially disclosed until after it had compromised the data of more than 69,000 users, compounded these issues. The breach followed bribery of Coinbase customer service employees and has led to several class-action lawsuits and investigations, including one by the U.S. Department of Justice. Following this breach, shareholders alleged that Coinbase and its CEO, Brian Armstrong, failed to adequately inform investors, contributing to a notable decline in stock value by 7.2%.
Response to Government Requests
Despite these challenges, Coinbase asserts that it thoroughly reviews each government request on an individual basis. The company aims to minimize the exposure of personal data by providing anonymized or aggregated information wherever feasible, emphasizing that not all requests will result in the release of data. Moreover, the exchange is careful to maintain that it does not allow direct government access to its systems.
Regulatory Environment Changes
This report has emerged at a time when regulatory pressures in the U.S. seem to be easing for Coinbase. The Securities and Exchange Commission (SEC) recently discontinued a prolonged enforcement action against the exchange that accused it of operating without proper securities registration. This shift in regulatory approach comes under a new chair, Paul Atkins, who has indicated a move toward clearer guidance and a more collaborative stance with cryptocurrency firms.
