Top US-based crypto exchange COINBASE is facing a class lawsuit for its alleged failure to secure its customers’ accounts.
According to recent court documents, Coinbase customer George Kattula that his account was hacked and his crypto assets were stolen because of the platform’s failure to implement adequate security measures against fraudulent activities.
“Contrary to its representations, Coinbase does not properly employ standard practices to keep consumers’ accounts secure.”
Kattula alleges that in April, nearly $6,000 worth of digital assets in his account were siphoned to unknown wallets after he attempted to change his password as advised by an email purported to be from Coinbase.
“Coinbase failed to delay the processing or execution of the above suspicious activity on Plaintiff’s account.
Coinbase-authorized unknown parties also attempted to purchase additional cryptocurrency ‘on margin,’ that is with money borrowed from Coinbase.
On April 28, 2022, Coinbase allowed the hackers who breached Plaintiffs’ Coinbase account to withdraw $1,000 from Plaintiff’s bank account.”
The plaintiff, who is filing the class action lawsuit on behalf of other Coinbase customers, also alleges that the exchange locks users out of their accounts, which leads to financial losses due to the volatile price of crypto assets.
He also accuses the firm of not disclosing that it holds securities on its platform.
“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 freefalls 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.”
