Coinbase Wallets Hacked, Frozen Without Warning, Claims Class Action Lawsuit

Coinbase Wallets Class Action Overview:

• Who: A pair of Coinbase wallet holders locked out of their crypto accounts filed a class action lawsuit Tuesday.  
• Why: The cryptocurrency exchange company allegedly froze them and other account holders out of their Coinbase wallets or allowed them to be hacked.  
• Where: The class action lawsuit was launched against Coinbase Global, Inc and Coinbase, Inc in California federal court.  

A pair of cryptocurrency users say their Coinbase wallets were either hacked or frozen without warning and their pleas to release their accounts so they could access funds went unheeded by Coinbase Global, Inc and Coinbase, Inc, in a class action lawsuit lodged against the companies in California federal court Tuesday.  

Lead plaintiffs, Cristian Kelly and Kenneth Thall, want to represent others who lost access to their Coinbase wallets. They say Coinbase, the largest cryptocurrency exchange in the US, misled them about the security of its services and “real-time” access to funds stored with the company.  

Coinbase users can store their cryptocurrencies in a digital “wallet,” as well as buy, sell, spend, and trade cryptocurrency. 

Coinbase Wallets Hacked, Frozen Without Warning 

Kelly claims that his Coinbase wallet — containing approximately $18,000 in Ethereum cryptocurrency — was potentially hacked when he called the company to add a feature to his account. He says that instead of helping him get to the bottom of the situation, Coinbase froze him out of his account for months.  

Thall alleges that he was alerted by his bank that his Coinbase wallet containing about $8,000 in Bitcoin may have been hacked. Thall says that when he brought up his concerns to Coinbase, he was similarly locked out of his account for an extended period of time.  

Kelly and Thall say that they decided to store their cryptocurrency in Coinbase wallets based on the companies’ promise to provide “customers a secure way to purchase, store, and transact in crypto assets” and provided “24/7/365” access to their funds.  

Instead, the plaintiffs say that they were locked out of their Coinbase wallets for extended periods of time. 

“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,” alleges the class action lawsuit. “Making matters worse, Coinbase fails to timely respond to customer pleas for support and help, and also fails to preserve and safeguard customer funds as it promises.” 

Indeed, Kelly and Thall each claim that the crypto company ignored their repeated requests to unfreeze their Coinbase wallets. They want to represent consumers nationwide who signed on with the rapidly growing crypto exchange company.  

The plaintiffs are seeking damages on behalf of Coinbase wallet holders, along with a court order forcing the company to unfreeze accounts.  

Coinbase has found itself in legal hot water recently, with another group of Coinbase wallet holders lodging a class action lawsuit in California federal court in June. Last year, the company paid out nearly $1 million to settle claims that they aided and abetted the theft of Cryptsy cryptocurrency. 

Do you have a Coinbase wallet? Have you ever been hacked or locked out of that account for no reason? Tell us about your experience in the comments section! 

The plaintiffs are represented by Timothy G. Blood, Thomas J. O’Reardon II, and James M. Davis fo Blood Hurst & O’Reardon, LLP and James M. Evangelista, David J. Worley, Kristi Stahnke McGregor, and Leslie G. Toran of Evangelista Worely, LLC.  

The Coinbase Wallets Class Action Lawsuit is Kelly, et al. v. Coinbase Global, Inc., et al., Case No. 3:21-cv-06010 in the U.S. District Court for the Northern District of California San Francisco Division.

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