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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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368 thoughts onCoinbase Randomly Locks Users Out of Accounts for Months, Deletes Funds, Class Action Lawsuit Alleges
Coinbase locked my ETH ten weeks ago. I was moving funds in anticipation of a market spike. Crypto trading is my livelihood, and I make most of my gains in a short bull market on alt coins, having to stretch it between market swings. This situation has shut down my business, right at the beginning of the bullish altcoin season. They don’t understand the challenges of trading without capital, but it’s practically impossible. Despite continuous calls and emails, they’ve made me go through KYC multiple times, resend selfies, complete surveys, and resubmit ID pictures, yet there’s been no progress.
My original account I had used for 18 months and I had the nerve 😂 too moved crypto out of Coinbase 3 times in a month and they locked my account claiming a security breach. I called and was on the phone for over an hour and after all of that time I got the statement there is nothing I can do for you. Can I withdraw my money not when it is a suspected security breach, account locked for 10 days. Moved money out the second my account was unlocked and bought more crypto 2 weeks later moved it out no problem. Connected an external Coinbase wallet and there was a give away/drawing/contest for the external wallet. The first step for the contest was deposit $40 worth of ETH into the new external wallet tried to move 1 ETH and account locks again for estimated 30 days, but don’t worry the account can receive and cash out. Every time I receive crypto and cash out the math doesn’t add up. I found out every time you sell and cash out when your account is locked the fees an higher than normal and the rate they pay you for the crypto is not the same as if your account is in good standing. The final straw was when I received a gift of 58 USDT from a friend right into Coinbase. My account locked nothing in nothing out and as I was chatting over instant messaging with customer service I was accused of money laundering and my account was under investigation. Account will be locked for a minimum of 30 days and after 36 days my account was gone.
New account has been opened 6 weeks and was locked today when I tried to send crypto out for the second time this week to a different exchange platform, possible security breach estimated 30 days. Today cost me $800 to transfer money to Coinbase buy USDT sell USDT and transfer out and I asked about a refund because of the inconvenience and they said we are sorry for the inconvenience.
Have been dealing with Coinbase for months. They keep telling me I need to verify my identity. I have done it several times. Then there is a 24 or 48 delay. I just want my money out!
I’ve been trying to access my account for weeks. I got a new phone and forgot to transfer my authentication app I use to log in to Coinbase. I’ve gone through their account recovery process over a dozen times including up loading my drivers license and a photo of myself. Each time it fails. When I open a case I get the same response with a list of things to try, even though I already tried them. I respond to the case by email several times explaining this but every time the response is the same and within a couple hours the case is closed. Based off the responses I highly doubt I’m communicating with a real person, just AI.
They locked me out of my mining of ETH acct for a 2nd time in 7 weeks Coinbase Wallet & Coinbase Group are complete International Extortionist and blatantly lie to their investor/Miners of ETH specifically. I need to get involved with either an ongoing Class Action lawsuit or start another one against them, ASAP. seems they only want to destroy their investors financially.
Coinbase took all my money. Deposited funds and was able to buy the first day. Day two i couldn’t buy nor sell or withdraw anything. Coinbase kept asking for more money stating i didn’t pay then but yet funds was taken out my bank account for coinbase. Coinbase then proceeded to lock me out my account where the i couldn’t access or sell anything. Coinbase ended up selling my stocks of there choosing. Still have not seen my money i invested nor the money coinbase got selling my stocks
My account was locked saying I was trading in countries not allowed. I can prove I was not out of my state. Customer service says I have been escalated to another department but of course I can not speak to anyone.
They’ve restricted my account as well for zero legitimate reason. I’ve had endless useless chat exchanges with them. There’s no phone number or email where someone with authority to address these things can be reached. They provide canned responses and waste your time. This cannot be legal.
10k+ locked up yesterday. They claimed it was due to off-platform transfer, which never happened. The said they’d reinstate the account as long as I’d fulfill the new KYC requirements (this is now the fourth time I’ve had to go through this process, each time they’re asking for more and more). Now this time, using the same identification as before and a selfie, the KYC process kicks back the submission with no path to recourse. So now they’re holding my crypto and fiat holdings without being able to provide any tangible reason. I’d agree there’s fraud taking place and Coinbase is the fraudster.
10k locked up after random, know your customer requirements refused I’d and selfie. What’s the outcome here? These folks shouldn’t be allowed to steal people’s money.