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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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369 thoughts onCoinbase Randomly Locks Users Out of Accounts for Months, Deletes Funds, Class Action Lawsuit Alleges
Interesting. I have had nothing but a seamless and optimal trading experience with Coinbase. No lost funds, no access issues, nothing; I’m on the site or app every few days and love it.
My son did have issues with authentication and verification of accounts that kept him locked out for awhile (weeks) after he became eligible to join at age 18, and we lost out on the referral incentive because he never “qualified” during the timeframe, and he still has (a year later) never been able to participate in Coinbase Earn (the incentives for learning about new cryptocurrencies), despite us reporting this multiple times. I wonder if that’s related? If it is, he may be interested.
Add me
Add me
I don’t have an account with Coinbase, however, I had a very similar experience with my “Stash” investment account. I was selling off my stocks and not long after that I couldn’t log in to the Stash app or their website. After many back and forth emails, calls, etc. I was able to get into my account. I too believe that I missed out on investment opportunities!!!
Why doesn’t anyone charge Swagbucks for this? They do the same thing!
They have stolen money multiple times with it just disappearing when it’s being transferred!! Add me!!
I lost 24k add me, please.
Lost over 26,000 because of this
Constant problems with coinbase. I have lost 1000’s of dollars because of not being able to access my account to stay on top of crypto trades. For example, lost 39,000 for not being able to log in to move money from bitcoin.
I had a ridiculously bad experience with them before the hard fork-they coerced me into transferring my money off the site so they would’ have to pay me the Bitcoin cash that everyone who stayed, received two days after the coercive email indicating we could lose all of our BTC if we didn’t remove it before that fork. They also, held my bank wire for nearly 70 days before releasing it-this was for 9,000 USD, and the losses resulting from that delay compound to three times the wired amount due to gains not received-NO DOUBT I ma a full fledged candidate, I have proof of all of this-in writing.