Coinbase Ranks 20th in $3.4B Trading Volume Spurt as AI Code Vulnerability Sparks Sell-Off

On September 5, 2025, , . Despite this, , reflecting investor caution amid emerging cybersecurity concerns. A newly discovered vulnerability, the “CopyPasta License Attack,” has raised alarms about Coinbase’s reliance on AI-driven code generation tools like Cursor. Cybersecurity firm HiddenLayer revealed the flaw allows malicious code insertion into seemingly innocuous files, such as LICENSE.txt, potentially compromising AI-assisted development pipelines. The exploit exploits Cursor’s Auto-Run mode, bypassing manual approval steps, and highlights systemic risks in automated coding environments.

Coinbase CEO has aggressively pushed AI adoption, . While this strategy accelerates development, critics argue it prioritizes speed over security. Experts like Carnegie Mellon’s and crypto analyst have labeled the AI-driven approach a “giant red flag,” warning that widespread automation could introduce vulnerabilities. Coinbase claims AI-generated code is vetted and excluded from critical systems, but the CopyPasta attack demonstrates gaps in current safeguards. The incident has intensified scrutiny over Coinbase’s security practices, particularly as rivals like Microsoft and Google also expand AI in software development.

Regulatory and technical challenges continue to weigh on the crypto sector, with Coinbase’s stock reacting to broader market dynamics. The firm’s push for AI-driven innovation faces a delicate balancing act between operational efficiency and risk mitigation. As the industry grapples with evolving threats, Coinbase’s ability to address these concerns will likely influence investor sentiment and long-term trust in its platform.

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