Saturday, October 8, 2022

Coinbase Faces Lawsuit For Exposing Customers’ Accounts

Coinbase, which recently lost its spot as the exchange with the largest Bitcoin (BTC) holding, is currently faced with a class action lawsuit after failing to properly secure customers’ accounts. The lawsuit was filed in the United States District Court for the Northern District of Georgia. Per the complaint filed, Coinbase opened its users up to financial losses.

The allegations levied against the crypto exchange state that the users were left helpless and accessible to breach and theft. Unauthorized transfers were initiated and approved from the user’s accounts due to the lack of stringent security measures. Also, some users were locked out of their accounts for a long temporal period while others were completely shut out.

Additionally, Coinbase was accused of listing securities on its exchange platform and this is a violation of federal laws.

The lawsuit was filed by one of its customers, George Kattula, who made a complaint against Coinbase and its subsidiary. To make his case, he mentioned that the exchange does not safeguard its customer’s account. George also regarded Coinbase as an unregistered broker-dealer.

Notably, the plaintiff has been a customer with Coinbase for almost eight months now. Barely three months after he opened his account with Coinbase was when an attack struck his wallet. Some unknown hackers were permitted to transfer almost $6,000 in crypto from his wallet. Thereafter, they initiated a transfer of $1,000 cash from his bank account which was approved.

George Kattula Leads More Plaintiffs in Coinbase Lawsuit

After reporting to Coinbase, no attempt was made to recover his funds or reimburse his wallet.

Instead, his complaint was rejected by the cryptocurrency exchange and his account was frozen. It was not until the plaintiff started seeking other customers who had similarly been locked out of their account before Coinbase responded. So far, there are more than 100 other plaintiffs who are being led by George Kattula.

Eventually, Coinbase discovered that the IP address of the wallet used for the attack was not associated with George. In addition, the exchange realized that it was far from the physical location where he always operated his account from. At the end of the day, only his $1,000 was refunded

Presently, George’s legal representative is asking for a damages fee of $5 million including legal costs. Likewise, the suit is requesting injunctive relief and a binding judgment.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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