The Daily: Coinbase battles extortion attempt as data breach costs could hit $400 million, JPMorgan sees more upside for bitcoin than gold, and more

Happy Thursday! The U.S. Senate could vote on a revised GENIUS Act stablecoin bill by Memorial Day — a version that reportedly drops language targeting President Trump’s crypto ties, senators say.

In today’s newsletter, Coinbase turns the tables on a $20 million extortion attempt while the costs of its data breach could reach $400 million. JPMorgan says bitcoin is likely to have more upside than gold into year-end, BTCS seeks to raise $57.8 million to buy ETH, and more.

Meanwhile, smart wallet adoption surges with over 11,000 EIP-7702 authorizations on Ethereum within a week of its Pectra upgrade.

Plus, eToro CEO Yoni Assia says Warren Buffett convinced him to focus less on crypto.

Let’s get started.

Coinbase battles extortion attempt as data breach costs could hit $400 million

Coinbase launched a $20 million bounty for information that leads to the identification and conviction of attackers who tried to extort the crypto exchange for the same amount by threatening to leak stolen customer data.

• Hackers allegedly bribed offshore support staff to access personal user data — affecting roughly 1% of monthly transacting Coinbase users.
• Coinbase said the rogue employees behind the breach were immediately fired upon discovery. However, the company did not disclose when the leak occurred or how many staffers were involved.
• The attackers then demanded $20 million in bitcoin, threatening to leak names, addresses, and government IDs of customers online, which they potentially also used to trick Coinbase clients in rampant social engineering campaigns.
• However, “no passwords, private keys, or funds were exposed, and Coinbase Prime accounts are untouched,” the crypto exchange confirmed.
• Coinbase refused to pay the ransom, reported the incident to law enforcement, turned the tables on the hackers by offering the bounty, and pledged to reimburse impacted users.
• In a subsequent filing with the SEC on Thursday, Coinbase estimated the breach could cost between $180 million and $400 million in remediation and voluntary reimbursements.
• The breach confirmation sparked mixed reactions in the crypto community, with some praising Coinbase’s transparency and others criticizing its delayed disclosure.
• Meanwhile, the SEC has been investigating whether Coinbase misstated its user numbers in past disclosures, The New York Times reported on Thursday.

JPMorgan sees more upside for bitcoin than gold in H2

JPMorgan analysts say the debasement trade hedge against weakening fiat currencies has become a zero-sum game this year, with bitcoin now rising at gold’s expense.

• Gold has fallen nearly 8% since its April 22 peak, while bitcoin has climbed 18% over the same stretch.
• The analysts say this shift is also visible in investor flows, with money moving out of gold ETFs and into spot bitcoin and crypto funds over the past three weeks.
• Going forward, they see more upside for bitcoin than gold in the second half of 2025, boosted by corporate accumulation, a maturing derivatives market, and growing U.S. state-level support.

Blockchain firm BTCS pursues $57.8 million raise to buy ETH

Nasdaq-listed BTCS plans to issue up to $57.8 million in convertible notes through a facility agreed with investment firm ATW Partners to accumulate ETH, calling it a “critical inflection point” for the asset.

• The firm has already issued its first tranche of notes, worth $7.8 million, and may raise the additional $50 million pending mutual agreement between the parties.
• BTCS Chairman and CEO Charles Allen personally backed the move with $95,000 of his own funds, with an additional $200,000 invested by a trust of which he is a beneficiary.
• “By increasing ETH holdings, BTCS aims to deploy additional validators, expand staking rewards, and further optimize block production economics,” the firm said, describing ETH as a core part of its revenue generation strategy.

Ark Invest buys $9.4 million worth of eToro shares on Nasdaq debut, sells own Bitcoin ETF

Cathie Wood’s Ark Invest scooped up $9.4 million in eToro shares on its Nasdaq debut on Wednesday, continuing a strategy of backing crypto-related firms at IPO, as it did with Coinbase in 2021.

• eToro saw a 29% jump in its share price on its first day of trading as a public company under the ticker ETOR, closing at $67. That followed an upsized initial public offering that priced shares at $52 each, reflecting stronger-than-expected demand.
• Alongside the eToro buy, Ark sold off a total of $7.9 million worth of its own U.S. spot Bitcoin ETF (ARKB) from two of its funds, though it remains among their top holdings.
• Meanwhile, the investment firm also picked up $7.6 million worth of 3IQ’s Toronto-listed Solana staking ETF and sold 14,390 shares in Jack Dorsey’s Block as it rebalanced its fund weightings.

MetaMask co-founder Dan Finlay says token is still a ‘maybe’

In an interview on The Block’s Crypto Beat podcast, MetaMask co-founder Dan Finlay said a native token is “maybe” still on the table, but would be clearly announced inside the popular web3 wallet beforehand.

• Finlay pointed to a friendlier U.S. regulatory environment under President Trump as a potential enabler for “more kinds of token launches,” without committing to any concrete plans.
• MetaMask has discussed launching a token, tentatively named MASK, since as far back as 2021. However, Finlay warned users to ignore speculation and scams, stressing that no legitimate token would ever be promoted via social media or unsolicited messages.

In the next 24 hours

• U.S. FOMC member Mary Daly will speak at 9:40 p.m. ET on Friday.
• Immutable, Moca Network, and Arbitrum are set for token unlocks.
• Consensus concludes in Toronto.

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