The sharp drop in shares UnitedHealth experienced over the past month says a lot about the risks companies can face if they decide to go public. In crypto’s case, the consequences can be even worse.
The numerous data breaches, security risks, and regulatory uncertainties surrounding crypto raise the stakes for companies contemplating a public offering. BeInCrypto discussed these significant tradeoffs with AR.IO, Naoris Protocol, Galxe, and CyVers.
Market Sentiment Drives Sharp Declines for Two Major Companies
A healthcare giant and a leading crypto exchange saw their stocks tumble this week after a series of unfortunate events came to light, spooking investor confidence.
UnitedHealthcare’s shares dropped 16.5% on Thursday amid an ongoing Justice Department Medicare fraud investigation and the recent resignation of its CEO.
That same day, a cybersecurity attack on Coinbase compromised account data for some of its customers. In addition to the company’s projected losses of $180 to $400 million, the incident has triggered widespread security concerns among its user base.
The company’s market perception dwindled in response, with its stock 7% lower by the day’s end.
These incidents highlight how strongly market sentiment and company-specific news can affect public companies, with potentially greater repercussions for those in the crypto industry.
Are Publicly Traded Crypto Companies Inherently More Vulnerable?
Crypto companies, especially exchanges like Coinbase, have historically been vulnerable to user-end security breaches, which can result in data and fund losses. Coinbase’s high profile and the large sums it manages make it a prime target for cybercriminals.
“Cybercriminals are aware that crypto is lucrative, with billions stolen every year,” David Carvalho, founder and CEO of Naoris Protocol, told BeInCrypto.
Coinbase’s transition to a publicly traded company in April 2021 expanded its exposure to various risks due to its higher profile and increased attractiveness to hackers seeking to make a statement.
“Going public makes any company a bigger target for thieves, but it’s perhaps a bigger problem for crypto-related companies because the crypto industry has some of the world’s best– and many are anti-establishment. It’s possible these people wanted to make an example of Coinbase today, and they succeeded,” Phil Mataras, founder of AR.IO, added to the conversation.
Exchanges that store all their assets on a single platform become particularly vulnerable to exploitation.
The Vulnerability of Centralization in Crypto
Data from Chainalysis shows that cryptocurrency fund losses in 2025 have already surpassed the total losses of the previous year. Because of their centralized structure, centralized exchanges are a primary target.
Given this reality, crypto firms spend billions of dollars on security to minimize security threats.
“Web3 by default inherits Web2’s centralized vulnerabilities, therefore, decentralized security is the only answer– systems must be upgraded urgently now to mitigate these growing risks,” Carvalho said.
But sometimes, security isn’t enough of a preventative measure. As hacks become more frequent, so do hackers’ sophistication and professionalism.
“Coinbase has demonstrated maturity in areas where the crypto space is most fragile: security, compliance, and user trust. However, as one of the world’s biggest centralized exchanges, it will always be an enormous target for thieves and hackers,” Galxe founder Charles Wayn told BeInCrypto.
Firms, however, can better manage their financial exposure to market sentiment. More safeguards are available to protect stock performance.
Is Going Public Worth the Risk for Crypto Companies?
Crypto companies considering entering the public market following Coinbase’s lead must carefully evaluate the industry’s inherent risks. Frequent data breaches and security threats pose significant challenges for publicly traded entities.
Although Coinbase has seen major growth in the stock market following its inclusion in the S&P 500, its news of a data breach caused a significant momentary dip.
The rapid negative stock reaction to Coinbase’s data breach illustrates how operational vulnerabilities can directly impact market value. The company’s share prices recovered after transparent communication and urgent risk mitigation efforts.
Yet, it shows that crypto’s exposure to risks and the wider impact of an IPO can be a dangerous mix.
So, while going public provides benefits, crypto companies must maintain strict security within an industry characterized by unclear regulations.
“Going public can boost a crypto firm’s credibility and access to capital, but only if its security posture and compliance framework are rock-solid. In today’s shifting regulatory landscape and face of sophisticated threats, any pre-IPO checklist must include continuous security audits, penetration testing, real-time threat interception, and rigorous fraud prevention,” CyVers CEO Deddy Lavid said.
If they dont, the consequences can be irreversible, he warned.
“With regulations lagging, these high standards are critical. Otherwise, you risk your assets, traders, and brand,” Lavid concluded.
Those who go down this path must learn to tread with care.
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