New Class Suit Against Coinbase Over Unapproved Asset TransferAugust 17, 2022
There has been a new suit brought against the crypto trading platform, Coinbase before the federal court in Georgia. The class suit alleges that Coinbase carried out unapproved transfers of assets, fund freeing, and locking users out of their Coinbase accounts for a long time.
The suit went ahead to say that Coinbase’s actions led to huge losses for users. It became more pronounced, especially with the market volatility over the last months.
The suit filed by Coinbase investors who hold the platform’s wallet and its account holders alleges that their accounts were breached. They are said to have incurred heavy losses due to the unapproved asset transfers. It is said to include the unapproved transfer of some unregistered digital securities that are listed on the platform.
The lead plaintiff in the case, George Kattula, said a mail from Coinbase asked him to change his password, and he obliged. Kattula claims that cryptocurrencies worth almost $6,000 were withdrawn from his Coinbase account and sent to unknown entities.
Every attempt to get his account secure went without a response, Kattula said. The suit goes further to claim that Coinbase locks out users from their accounts for absolutely no reason. Users are thus not able to gain access to their assets either permanently or for a long period of time at best.
A Call to Responsibility
Because the crypto market is extremely volatile, having assets rise or fall by as much as 40% in a day is not uncommon. Users’ inability to get into their accounts and either buy or sell their assets led to so many losses for the account owners.
The suit went on and said Coinbase did not respond promptly to customers’ calls for support at times of risk. It says the platform did not safeguard and preserve customers’ assets according to its promises. It has, therefore, let hackers take off with funds from users’ accounts.
Kattula said Coinbase refunded $1,000 wrongfully moved from an account, yet, it froze the account and did not recover other crypto assets that were stolen.
Coinbase is under a lot of criticism by investors for its failure to stave off losses from unapproved transactions. And this has led to many actions before the court. The foregoing has also made Coinbase seek the Security and Exchange Commission’s input with regard to clarifying security matters.
As of the time of this report, Coinbase was yet to respond to any comments on the matter.