Ari Paul accuses Coinbase of losing $25M in BlockTower funds and covering up $1B in hacks

On September 28, 2026, BlockTower Capital founder Ari Paul publicly accused Coinbase of losing $25 million of his firm's funds and covering up over $1 billion in repeated hacks across a dozen institutional clients. Paul cited ongoing legal processes for his lack of further detail. Coinbase support initially reached out privately, but on September 29, 2026, a spokesperson strongly denied the allegations, stating Coinbase is not hiding hacks and does not retain API transaction data.

Accusations of a $25 million loss

• ▪BlockTower Capital founder Ari Paul stated on September 28, 2026, that he could not provide further details regarding the alleged $25 million Coinbase loss due to multiple ongoing legal processes.
• ▪BlockTower Capital founder Ari Paul accused Coinbase on September 28, 2026, of losing approximately $25 million of the firm's funds a couple of years prior.

Allegations of a $1 billion cover-up

• ▪On September 28, 2026, BlockTower Capital founder Ari Paul alleged Coinbase's loss of funds was part of a pattern of covering up security failures affecting at least a dozen institutional counterparties, with undisclosed losses totaling over $1 billion.
• ▪As of September 29, 2026, no independent verification, court filings, or credible third-party evidence had been published to corroborate Ari Paul's claims of a $1 billion Coinbase cover-up.

Coinbase's response to the allegations

• ▪The official Coinbase Support account initially responded to Ari Paul's September 28, 2026 post by sending a private direct message to discuss the allegations.
• ▪On September 29, 2026, a Coinbase spokesperson publicly rejected Ari Paul's allegations, stating that Coinbase is not hiding hacks, did not lose $1 billion, and does not retain API transaction info.

Context of the social media thread

• ▪Ari Paul's accusations against Coinbase were posted on September 28, 2026, as a reply in a wider social media thread initiated by crypto investor Cobie.
• ▪In the social media thread initiated by Cobie, an X user named 'Kuno' claimed Coinbase stole $1.2 million, which Cobie characterized as a potential scam or engagement farm.

The August 2024 hack

• ▪Coinbase was sued in May 2026 for allegedly withholding frozen cryptocurrency assets linked to a $55 million draining hack that occurred in August 2024.
• ▪The victim of the August 2024 hack allegedly clicked a malicious link spoofing the Ethereum DeFi management tool DefiSaver, authorizing a smart contract permission that gave thieves control of his crypto wallets.

Debatable claims

• ▪Coinbase bears responsibility for client losses linked to API security failures
• ▪Ari Paul was justified in publicly accusing Coinbase of a cover-up before presenting evidence
• ▪Cryptocurrency exchanges should publicly disclose all security breaches regardless of size
• ▪Coinbase's security infrastructure is inadequate for institutional cryptocurrency custody