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Coinbase Faces New Class Suit Over Unauthorized Asset Transfers

1 min
17 August 2022, 04:36 GMT+0000
Updated by Remmy Bahati
17 August 2022, 21:45 GMT+0000
In Brief
  • Coinbase users’ funds not secure, new class action suit claims.
  • The plaintiff claims the exchange transferred his crypto without authorization and locked his account.
  • Requests for assistance from Coinbase went unanswered.
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A proposed class action complaint by the investors holding Coinbase Wallet and account holders claim Coinbase has been breached its user agreement by locking clients out of their accounts and authorized transfer of assets without consent.

Coinbase asked customers to change passwords

George Kattula, the lead plaintiff says he changed his passcode as asked in an email from Coinbase, and later, close to $6,000 worth of cryptocurrency was withdrawn from his account and transferred to unknown parties. Efforts to have his account secured fell on the deaf ears of the exchange.

The suit claims that “Coinbase improperly and unreasonably locks out its consumers from accessing their accounts and funds, either for extended periods of time or permanently. Because of the extreme volatility of cryptocurrencies’ value with free falls of 40% within 24 hours not unheard of, the inability to access an account to sell, buy, or trade cryptocurrency leads to severe financial loss to account holders.”

Response time lacking

The suit also alleges that Coinbase failed to respond to pleas from customers and has allowed hackers to take off with $1,000 from his bank account.

“Although Coinbase reversed the unauthorized transfer of the $1,000, it froze his account and refused to cover all the cryptocurrency that was stolen,” Kattula claims in the suit.

Coinbase has come under immense fire and criticism by its investors for failing to prevent losses of unauthorized activities, and these have failed numerous actions in the courts. This has also prompted the exchange to seek the SEC’s input on security classification.

At the time of press, Coinbase had not responded to comment on the matter.


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