new class action lawsuit has been filed against Coinbase in a federal court in Georgia. The company allegedly gets involved in unapproved asset transfers, freezes funds, and locks customers out of their accounts for extended periods, causing them to suffer significant losses due to cryptocurrency market uncertainty.
The suggested class action complaint by Coinbase Wallet and account holders claims that their accounts have been compromised and they have suffered losses due to the unauthorized transfer of assets. This includes the unauthorized transfer of non-registered "crypto securities" listed on the platform.
Change in customer passwords
The lead plaintiff, George Kattula, claims that after changing his passcode as instructed in an email from Coinbase, nearly $6,000 in cryptocurrency was forced to withdraw from his account and moved to unknown parties. Attempts to secure his account were met with silence from the exchange.
According to the lawsuit, "Coinbase improperly and unreasonably restricts its customers' access to their accounts and funds, either for extended periods of time or permanently. Due to the extreme volatility of cryptocurrency values, with free falls of 40% within 24 hours not uncommon, inability to access an account to sell, buy, or trade cryptocurrency results in severe financial loss to account holders."
The suit also claims that Coinbase failed to respond to customer needs for assistance and support on time, failed to preserve and safeguard customer assets as promised, and allowed hackers to steal $1,000 from his bank account.
"Although Coinbase reversed the unauthorized transfer of $1,000, it froze his account and refused to cover all of the stolen cryptocurrency," Kattula claims in his lawsuit.
Coinbase has faced intense scrutiny and criticism from its investors for failing to prevent losses from unauthorized activities, and the company has faced numerous legal challenges. This has also urged the exchange to seek guidance from the SEC on security classification.
Coinbase had not responded to requests for comment at the time of publication.