BlockTower founder presses $25m Coinbase loss claim

Ari Paul, the founder and chief investment officer of BlockTower Capital, accused Coinbase of failing to return approximately $25 million belonging to his firm. Paul alleged that this loss, which occurred "a couple of years ago," was linked to repeated security breaches affecting at least a dozen other institutions and totaling more than $1 billion.

He made these claims in a social media post on September 28, stating that legal processes were underway, limiting the details he could disclose. However, Coinbase rejected Paul's broader accusation, stating it was not involved in a series of hacks and had not lost $1 billion, declining to provide further information about specific customers.

No publicly available evidence has yet confirmed either Paul's $25 million figure or his assertion about losses exceeding $1 billion across other firms. The dispute arose as Coinbase and Citi announced a partnership on the same day, integrating Coinbase's Virtual Account Wallet into Citi's banking-as-a-service offerings for institutional customers.

Paul's allegations emerged as Coinbase highlighted the partnership, focusing on security and counterparty risk in digital asset infrastructure. Paul claimed BlockTower had traced a pattern of breaches at other firms, though he did not specify the institutions, timing, or supporting documents. Coinbase advised customers to follow security practices, including secure API key management, but did not confirm the cause of the alleged loss.

The data-theft incident disclosed by Coinbase in May 2025, where criminals accessed customer information, was not linked to the $25 million loss Paul alleged. BlockTower Capital, previously an independent entity, was acquired by Arca on April 30, 2025, but Paul referred to the disputed funds as belonging to his firm.