Crypto Currents: DOJ opens probe into Coinbase breach

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

DOJ OPENS PROBE INTO COINBASE BREACH: The U.S. Department of Justice has opened a probe into the recent breach at Coinbase (COIN), involving criminals bribing employees and contractors in India to obtain client data, Bloomberg’s Chris Strohm and Jeff Stone reported Monday, citing a person familiar with the matter. Coinbase is working with the DOJ and other law enforcement agencies, welcoming pursuit of criminal charges against the perpetrators, according to the report. “We have notified and are working with the DOJ and other US and international law enforcement agencies and welcome law enforcement’s pursuit of criminal charges against these bad actors,” Coinbase Chief Legal Officer Paul Grewal said. Coinbase itself is not under DOJ investigation.

Additionally, in a filing with the Maine Attorney General’s office, Coinbase said its recent data breach impacted 69,461 people and that stolen data included government IDs, account info, and personal identifiers. The filing noted that the data breach occurred on December 26, 2024 and was discovered on May 11, 2025. 

Meanwhile on Tuesday, Fortune’s Luisa Beltran reported that Circle Internet Financial, issuer of crypto stablecoin USDC, filed paperwork to go forward with a long-awaited initial public offering. There is a chance Circle’s IPO won’t come to fruition since the company has taken part in informal talks to sell itself to Coinbase Global or Ripple, four banking and private equity executives told Fortune. In its negotiations to be sold, Circle is seeking at least $5B, which is the valuation it is targeting for its IPO.

STRATEGY BUYS MORE BITCOIN, FACES CLASS ACTION: In a Monday regulatory filing, Strategy (MSTR) announced it had acquired 7,390 bitcoin for about $764.9M at an average price of $103,498. The company also reported that on May 16, a purported class action lawsuit was filed in the U.S. District Court for the Eastern District of Virginia against the company, Michael Saylor, Phong Le, and Andrew Kang, alleging violations of Section 10b of the Securities Exchange Act of 1934 and Section 20a of the Exchange Act. The plaintiff, Anas Hamza, purports to assert claims on behalf of a purported class of investors, for a period running from April 30, 2024 to April 4, 2025, alleging that the defendants made false and/or misleading statements with respect to and/or failed to disclose information with respect to the anticipated profitability of its bitcoin-focused investment strategy and treasury operations, and the various risks associated with bitcoin’s volatility and the magnitude of the losses the company could recognize. The complaint seeks unspecified damages to the class, interest, attorneys’ fees, costs, and other relief. Strategy intends to vigorously defend against these claims. 

ANALYST INITIATES BITCOIN POWER COMPANIES: Citizens JMP initiated coverage of Hut 8 (HUT) on Thursday with an Outperform rating and $25 price target. With the ability to leverage existing deployments of low-cost and high-density power configurations currently present for bitcoin mining or hosting, the bitcoin power companies are “uniquely situated to provide additional space and power for data centers,” the analyst said. The firm added Hut 8 selling out of capacity could hypothetically result in a stock price of $74.00 per share for the high performance computing business alone, realized over the long term.

The firm also initiated coverage of Core Scientific (CORZ) with an Outperform rating and $15 price target. The firm said Core Scientific selling out of capacity could hypothetically result in a stock price of $48.00 per share for the high performance computing business alone, realized over the long term.

Additionally, Citizens JMP initiated coverage of CoreWeave (CRWV) with a Market Perform rating and no price target. The firm said that while CoreWeave’s multiples “are not unreasonable,” its rating is more about the funding gap and model. While Citizens can buy into a business model that requires the level of incremental funding demanded, it believes the current risk level relative to the business model is “simply too high,” with” too many unknowns.” Accordingly, it sees the shares as fairly valued.

The firm also initiated coverage of Applied Digital (APLD) with an Outperform rating and $12 price target. The firm said that while Applied Digital has higher risk and is controversial, selling out of capacity could hypothetically result in a stock price of $30.00 per share for the high performance computing business alone, realized over the long term.

Citizens JMP initiated coverage of TeraWulf (WULF) as well with an Outperform rating and $7 price target. The firm said TeraWulf selling out of capacity could hypothetically result in a stock price of $35.00 per share for the high performance compute business alone, realized over the long term.

CANAAN REPORTS Q1 EARNINGS: On Tuesday, Canaan (CAN) reported a first quarter loss per share of ($1.79) on revenue of $82.78M, which compared to a loss per share of ($1.06) on revenue of $35.09M for the same period last year. The company’s management also decided to withdraw its previously issued FY25 revenue guidance and guided Q2 total revenues to be approximately $100M.

Nangeng Zhang, CEO, commented, “In the first quarter, our industry endured intensified volatility stemming from a combined effect of seasonal softness and the abrupt rollout of new U.S. tariff measures. Despite this turbulent landscape, we delivered total revenues of $82.8M, which was substantially above our prior guidance. Driven by continued mass shipments of our A15 series, we successfully sold over 5.5M TH/s of computing power, a remarkable 62.6% increase year over year. At the same time, our mining business demonstrated strong momentum. Through solid execution of project expansion in North America and collaboration optimization, we rapidly enhanced our installed mining capacity to 6.6 EH/s by March 31. This, coupled with a higher average bitcoin price during the period, enabled us to achieve record-high quarterly mining revenue of $24.3M in the first quarter, a 58.6% sequential increase. As of the end of April, our global installed hashrate further grew to surpass 8 EH/s, including over 3 EH/s in North America.”

Following the report, Benchmark lowered the firm’s price target on Canaan to $2 from $3 and kept a Buy rating on the shares. The Q1 report “offered an impressive demonstration of the impact of the company’s diversified platform,” said the analyst, who noted that revenues exceeded management’s guidance despite the headwinds faced in both the company’s bitcoin mining equipment business and its proprietary self-mining activities. However, the “solid” Q1 operating performance is being overshadowed by tariff-related uncertainty, added the analyst, who also pointed out that Canaan’s market cap is only slightly higher than the value of its bitcoin and cash holdings.

CLEANSPARK PRICE TARGET LOWERED: On Wednesday, Chardan lowered the firm’s price target on CleanSpark (CLSK) to $20 from $26 and kept a Buy rating on the shares following a transfer of coverage. The firm believes the company “has a great deal of financial strength and flexibility” and will be able to self-fund its mining operations and expansion with the sale of mined bitcoins and still grow its bitcoin holdings. The shares are off over 50% from their 52-week high and trade at the low-end of the peer group, the analyst said.

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific, Greenidge Generation (GREE), Mara Holdings (MARA), Strategy, Riot Platforms (RIOT) and TeraWulf.

PRICE ACTION: As of time of writing, bitcoin rose roughly 5% this week to $109,150 in U.S. dollars, according to CoinDesk.