- Coinbase is facing yet another lawsuit, this time over its handling of customer accounts
- The class action lawsuit claims that the exchange locks users out of their accounts at crucial times
- Coinbase is facing three other lawsuits at the moment
Coinbase has been yet with yet another lawsuit, this time over alleged failings with regard to account access, especially at times of high volatility. A class action lawsuit has been filed against the exchange by a group of account holders who say they incurred losses when they were unable to access their accounts to sell their coins during market downturns, and that the exchange also fails to protect customers from hackers.
Account Holders Say Coinbase Locks Them Out
The lawsuit, brought by one George Kattula on behalf of a group of similarly affected individuals, claims that Coinbase “does not properly employ standard practices to keep consumers’ accounts secure”, arguing that it “improperly and unreasonably locks out its consumers from accessing their accounts and funds”. This is particularly noticeable, Kattula argues, when crypto markets experience the wild price swings for which they are known, leading to losses for account holders.
The case states that Coinbase also “fails to timely respond to customer pleas for support and help, and also fails to preserve and safeguard customer assets as it promises”, undermining its claim to give users “full control of [their] crypto”.
Interestingly, and in a nod to other legal issues currently plaguing the exchange, it also says that “Coinbase does not disclose that the crypto assets (or “cryptocurrency”) on its platform are securities, adding that the company “boldly flouts federal and state laws” by saying that it doesn’t need to register as a securities broker, something the Securities and Exchange Commission would argue with.
Coinbase Adds Lawsuit to Ever-growing List
The lawsuit alleges that, as a result of Coinbase’s conduct, “Plaintiff and Class Members have been damaged through the loss of their wallet and account access, the assets and investments in those accounts, the theft of sensitive personally identifiable information stored in their Coinbase accounts, and, among other things, their investment opportunities.”
This latter allegation comes on the back of a complaint that Coinbase failed to deal with the hacking of one member’s account and loss of funds.
Coinbase is already facing lawsuits from Craig Wright over allegedly passing off Bitcoin as BTC and not BSV, Craig Wright again over delisting BSV in 2019 and a shareholder who claims that the company made “false and misleading statements” in public filings relating to its Nasdaq listing.
