BlockTower Founder Alleges $25M Coinbase Loss Amid Citi Deal

A new controversy has drawn attention involving Coinbase, after Ari Paul, founder of BlockTower, stated in an X post today, September 29, 2026, that his company lost $25 million on the crypto exchange a few years back. Paul claims this loss is linked to a pattern of big, repeated hacks that, in his view, Coinbase kept hidden from users. He went further, saying he found at least 12 other companies suffered similar losses, with the total losses above $1 billion. Paul did not share more details, saying ongoing lawsuits stop him from doing so. 

Coinbase “lost” $25m of my firm’s a couple years ago. Turned out they were actually covering up massive and repeated hacks. Still wouldn’t return our money. We traced this to at least a dozen other affected firms and over $1b covered up. That’s all I can say for now as…

— Ari Paul (@AriDavidPaul) September 28, 2026

These claims come at a time when Coinbase is already being watched closely because of a different incident, a 2025 data breach where customer information was stolen. In that case, some overseas customer support workers reportedly took bribes from criminals to access Coinbase’s internal systems. The stolen data was then used by criminals to reach out to users while pretending to be a part of Coinbase’s support team. While people are talking about these two incidents together as a part of a bigger conversation about security at Coinbase, there is no proof right now that the 2025 data breach led to Paul’s $25 million loss claim.

Ari Paul’s $25 Million Claim

Paul’s statement has raised new questions about just how safe people’s money is at Coinbase. He says BlockTower lost $25 million a few years ago and later found it was because of large scale hacks that Coinbase covered up. Paul also said he tracked similar problems to at least dozen other companies and together, their losses add up to more than $1 billion. But for now, Paul has not released details or evidence behind these claims. He says ongoing court cases stop him from revealing more information.

Paul’s statements have started a bigger debate about what has happened to institutional money on Coinbase. After his comments, other users started speaking out about their own problems with money being stuck or lost on the platform.

Coinbase’s 2025 Data Breach

Coinbase has already dealt with a confirmed security issue involving customer data. In 2025, criminals went after the company’s overseas customer support, allegedly bribing support staff to steal customer information. These employees had access to Coinbase’s internal systems for their jobs. Reports say the stolen information was used by criminals to reach out to real customers, acting as if they were Coinbase employees.

Armed with real customer details, the criminals made their scam seem more real and tried to convince people to hand over their cryptocurrency. Paul’s story and this incident are different. The 2025 breach was about personal and account information being stolen, but Paul’s claim involves $25 million in BlockTower’s assets and earlier, bigger hacks. Coinbase has said criminals got customer details by paying support workers stationed outside the US, and those workers no longer work there. While some sensitive information was stolen, the company said passwords and private keys stayed safe.

Coinbase and Citi Expand Stablecoin Payment Partnership

This accusation by BlockTower’s founder comes at a time when Citi and Coinbase announced a partnership for stablecoin payments for businesses. This partnership will allow Coinbase to use Citi’s Virtual Account Wallet to power Coinbase Virtual Accounts, and will give customers bank-account-like functionality while automatically converting incoming fiat into stablecoins.

At the same time, Citi will allow institutional clients to accept stablecoin payment through Spring by Citi, with Coinbase Payments handling the stablecoin payments and converting them into fiat before settlement.

The initiatives are set to launch first in the Unites States and are aimed at simplifying the connection between traditional banking services and blockchain-based payments.