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Update:
- Cryptocurrency trading platform Coinbase asked a federal judge in California to send claims revolving around stolen funds caused by alleged hacker attacks to arbitration.
- Coinbase argues that users, who alleged the platform’s security failures that led to the attacks, agreed to arbitrate their claims when they signed their initial user agreements.
- Coinbase says that the user agreements include a provision that a user must arbitrate any dispute related to the use of its platform.
- The pair of investors behind the class action lawsuit argue Coinbase refused to restore the allegedly stolen funds and called the platform’s user agreement “unconscionable and unenforceable.”
Coinbase account hacks class action lawsuit overview:
- Who: Manish Aggarwal filed a class action lawsuit against Coinbase Inc. and Coinbase Global Inc.
- Why: Aggarwal claims security failures allegedly made by Coinbase have repeatedly led to the theft of ordinary customer accounts, such as his own.
- Where: The class action lawsuit was filed in California federal court.
(Aug. 29, 2022)
Security failures on behalf of Coinbase have repeatedly led to the theft of ordinary customer accounts, a new class action lawsuit alleges.
Plaintiff Manish Aggarwal claims Coinbase “does a poor job of protecting its user accounts from unlawful intrusion and thievery” and “does an even worse job of working to mitigate those thefts after they occur.”
Aggarwal further argues the cryptocurrency company is aware of the alleged problems with its account security procedures but fails to do anything about it.
“Coinbase is acutely aware of these problems and has paid large fines to regulators. Yet the problems persist and account holders like Plaintiff continue to be fleeced by hackers with access to Coinbase’s systems,” the Coinbase class action states.
Aggarwal wants to represent a nationwide class of current and former Coinbase users who registered for their account since April 1, 2021, and who, at any time, weren’t able to access or lost their funds.
Aggarwal claims hackers gained access to his Coinbase account — through no fault of his own — in April and drained it of more than $200,000 worth of funds.
Coinbase accused of failing to remedy situation after funds stolen
Coinbase, meanwhile, simply routed Aggarwal through its “automated complaint processing,” which deprived him of ever getting to speak about the situation with “any human being,” the Coinbase class action alleges.
“Plaintiff now brings this action so that he and countless others like him can be made whole, and so that others will not suffer similar misfortune,” the Coinbase class action states.
Aggarwal claims Coinbase is guilty of breach of contract and negligence, among other things, and is in violation of the Electronic Funds Transfer Act and California’s Unfair Competition Law, among other things.
Plaintiff is demanding a jury trial and requesting injunctive and declaratory relief along with an award of compensatory, statutory, treble and punitive damages for himself and all class members.
A separate class action lawsuit was filed against Coinbase earlier this month over claims the company fails to secure its customer’s accounts and runs its business without the proper registration requirements.
Also this month, Coinbase was accused of misleading its investors about both the compliance and strength of the company before its initial public offering.
Have you ever been unable to access or lost the funds on your Coinbase account? Let us know in the comments.
The plaintiff is represented by J. Noah Hagey, Matthew Borden, Ronald J. Fisher, J. Tobias Rowe, Jonathan Kortmansky and Pratik K. Raj Ghosh of Braunhagey & Borden LLP.
The Coinbase account hacks class action lawsuit is Aggarwal, et al. v. Coinbase Inc., et al., Case No. 3:22-cv-04829, in the U.S. District Court for the Northern District of California.
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