Coinbase faces a class action lawsuit

A new class action suit has been filed against crypto exchange Coinbase in the Georgia federal court. The lawsuit is claiming that the company engages in unauthorized asset transfers, freezes funds, and locks consumers out of their accounts for ample periods of time, causing consumers to incur substantial losses due to the volatility of cryptocurrency.

coinbase-lawsuit-news

The suggested class action complaint by the investors holding Coinbase Wallet and account holders reason that their accounts have been breached and incurred losses emerging from the unauthorized transfer of assets. This comprises the unauthorized transfer of non-registered crypto securities listed on the platform.

Coinbase requested customers to change passwords

George Kattula, the lead sure says he altered his passcode as asked in an email from Coinbase, and later, close to $6,000 worth of cryptocurrency was withdrawn from his account and transferred to unspecified parties. Measures to have his account secured dropped on the deaf ears of the exchange.

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

Must Read, SEC to investigate all crypto exchanges

Response time from the exchange is lacking

The suit further alleges that Coinbase could not timely respond to customer requests for support and help. It fails to preserve and protect customer assets as it promises, and has allowed hackers to take off with $1,000 from his bank account.

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


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