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Cryptocurrency exchange Coinbase randomly locks users out of their accounts for months at a time causing them to lose funds, and even erased accounts in their entirety, a new class action lawsuit claims.
The nationwide class action lawsuit was filed in California on June 4 by lead Plaintiffs Michael Leone, Joseph Treseder, Travis Reece, David Beavers, Fazal Us Saboor Ali, and Keisha Pinkey. The group of Coinbase users allege the company locked them out of their accounts for no reason, stopping them from trading, investing or selling their funds, and even deleted accounts completely.
Coinbase users can store their cryptocurrencies in a digital “wallet,” as well as buy, sell, spend, and trade cryptocurrency. According to the claim, the company proclaims that it is “building the cryptoeconomy – a more fair, accessible, efficient, and transparent financial system enabled by crypto.” It also says that it is a regulated and fully compliant entity, registered with the United States Department of the Treasury’s Financial Crimes Enforcement Network as a Money Services Business.
However, the groups of cryptocurrency traders say that in reality the company prevents its users from accessing their accounts and funds for arbitrary reasons and arbitrary amounts of time, stopping them from investing, spending, saving, earning, and using, or even withdrawing their funds. The lack of access resulted in the group’s accounts losing value, the class action lawsuit alleges.
Leone, who had $15,000 in his account, was locked out of his account in January for no reason, and despite sending more than 100 emails he has never received a response from the company, the claim states. Treseder, who had $30,000 in his account, was locked out arbitrarily in January and has failed to regain access to his account despite numerous attempts. Reece deposited previously-owned cryptocurrency into his Coinbase account, and after making the deposit he logged into his account to find it had disappeared, according to the class action lawsuit. He is yet to access his funds.
Beavers says that he was locked out of his account after contesting a “mistaken” $100 fee. According to the claim, he has been locked out of his account for several months despite attempts to contact Coinbase and regain access. Ali has been locked out of his account since January for no reason, despite filing numerous complaints to Coinbase, the claim states. And Pinkey says that she has been locked out of her account, which had $6,000, since February and has not been able to regain access.
Those who were eventually able to access accounts found that the value of their cryptocurrency had dropped significantly in the interim and some had no ability to sell or use the cryptocurrency held in their Coinbase accounts, the class action lawsuit alleges.
“In some circumstances, Putative Class Members’ accounts were erased in their entirety,” the claim states.
“Further, Defendant failed to provide Putative Class Members any explanation for where their cryptocurrency went or any remedy to retrieve it, causing significant losses.”
The claim says that Coinbase’s actions have resulted in irreparable harm to the traders.
The traders want to represent anyone in the United States who was locked out of their Coinbase account. They are suing for negligence, unjust enrichment, breach of contract and fiduciary duty, conversion and violation of consumer laws. They seek certification of the Class, damages, disgorgement, injunctive relief, interest, legal fees, and a jury trial.
This isn’t the first class action lawsuit to hit the world of cryptocurrency. In January, Ripple was hit with a class action lawsuit alleging the illegal sale of cryptocurrency. The case was one of a number that came after the Securities and Exchange Commission lodged a legal action against the payment processing company.
Do you have a Coinbase account? Have you ever been locked out of that account for no reason? Tell us about your experience in the comments section!
The traders are represented by Kevin Mahoney, Katherine J. Odenbreit, and Nicole G. Blanco of Mahoney Law Group, APC.
The Coinbase Account Access Class Action Lawsuit is Leone, et al., v Coinbase, Inc. et al., Case No. 3:21-cv-04286 in the U.S. District Court Northern District of California.
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367 thoughts onCoinbase Randomly Locks Users Out of Accounts for Months, Deletes Funds, Class Action Lawsuit Alleges
I RELATE TO EVERY ONE OF THESE COMMENTS, BETWEEN 2-3+ YRS GO, AFTER BEING ON COINBASE FOR AROUND TWO WEEKS, i was locked out with no explanation. I had made my 1st purchases ever. one of them being Ethereum, and it was climbing fast. My total investments only around 1000 bucks and i was very new at it all. I gave up trying to get back in after about a year. I decided to get back to fighting them. but have no CLUE HOW OR WHERE TO TURN! ANY IDEAS?
After I recovered my coinbase account, there was over 68 million dollars. After they identify who I was, over 20 million dollars was gone. Now I have over 48 million dollars in my account but I’m not allowed to trade or move my money out. I’m only allow read only