Lawsuit Alleges Coinbase’s Cybersecurity Failures Result in Unauthorized Asset Transfers and Losses

Group of customers has filed a lawsuit against coinbase, alleging cybersecurity failures that allowed hackers to breach their accounts and “incur losses arising from the unauthorized transfer of assets.” the plaintiff in the case alleged that $6,000 of cryptocurrency had been drained from his wallet to an address he had never interacted with before, and that coinbase had allowed the hackers to withdraw $1,000 from his bank account. the lawsuit was filed recently, in the last few months. it took place in the united states, specifically in the u.s. appeals court.

Lawsuit claims that coinbase does not use “standard practices” to protect its users’ accounts and “improperly and unreasonably” stops consumers from accessing their accounts and funds. it also alleges that coinbase’s dispute resolution process has “cumbersome conditions” that must be met before arbitration can be reached. coinbase attempted to keep multiple cases out of federal courts in recent months with limited degrees of success.

Plaintiff’s bank reversed the transaction, but coinbase retrieved the $1,000 that the hackers stole. this prompted the lawsuit, which accuses coinbase of systematically failing to honor the promises of its user agreement regarding dispute resolution. coinbase stock hit another all-time low this week, hitting just $32.40 per share, which may be a result of the lawsuit and other disputes.

By Evey Lovelace

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