Coinbase, a cryptocurrency exchange platform, has yet again found itself in court with a new suit filed against it. Allegedly, the company was involved in unauthorized asset transfers, suspending funds, and temporarily shutting aging accounts down causing considerable losses for some consumers due to the unpredictable nature of the crypto market.
According to George Kattula, the lead plaintiff, he was sent an email from Coinbase asking him to change his passcode. However, soon after it was changed, almost $6,000 worth of cryptocurrency was pulled out of his account and distributed to unknown accounts with the exchange not doing anything about it as of yet. The suit says:
“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.”
It was also said that Coinbase took a very long time to reply to customer requests for help and that it did not have proper security measures in place seeing as $1,000 was stolen from a consumer’s account by hackers. Kattula said: “Although Coinbase reversed the unauthorized transfer of the $1,000, it froze his account and refused to cover all the cryptocurrency that was stolen.”
Recently, Coinbase has been receiving harsh criticism due to the many reasons mentioned and due to the fact that it has not managed to slow down the current of losses streaming past as a result of unauthorized activities. Therefore, the exchange is looking for the SEC’s guidance with relevance to security classification.