A group of six Coinbase clients filed a class-action lawsuit against Coinbase. They’re alleging that the crypto exchange firm unfairly locked them out of their accounts for up to several months.
The crowd is seeking damages of more than $5 million for themselves and any other Coinbase client who registered an account in the last four years and who likewise got blocked from accessing their account for a lengthy period.
Jospeh Treseder of Oklahoma filed a complaint filed Friday in San Francisco federal court, alleged deposited $30,000 last December to buy the cryptocurrency XRP. Instead, a month later, he received an error message informing him that his login credentials were not valid.
Notwithstanding phoning and emailing the firm numerous times and accomplishing requested measures to authenticate his identity, Treseder states it took several months for Coinbase to restore his account.
Treseder and the others say not being able to access accounts hindered them from trading or withdrawing their funds; in some cases, it made them lose money when prices dropped. They accuse Coinbase of the setback, stating the business should not have permitted this to take place.
Coinbase “engage[d] in a scheme … [that] prevents its consumers from accessing their accounts and/or funds for arbitrary reasons and arbitrary amounts of time, and thereby … unable to ‘invest, spend, save, earn, and use,’ or even withdraw their funds,” the complaint reads.
In reply, a Coinbase spokesperson provided the following statement:
“We take all customer concerns seriously. We are aware of the complaint and are reviewing the allegations, but we have no further comment at this time.”
The complaints are only allegations at this point, and it’s not clear if they are all true or if some of the users did something to justify Coinbase locking the accounts. But the lawsuit is likely to call further attention to Coinbase’s customer service practices, which have been a cause of dissatisfaction for many clients.
The group who filed the complaint recount similar tales of being unable to reach the company; worse, being repelled by automated reply. Michael Leone of California alleges,
It’s also not evident much legal tension the case will get. The Coinbase clients make a laundry list of legal claims. This includes negligence, breach of fiduciary duty, and violation of contract, as well as unlawful enrichment; the latter claim is based on Coinbase allegedly earning interest on their funds while their account was frozen. But that doesn’t mean a court will agree.
The case doesn’t indicate how much damages each eligible Coinbase user should collect if the clients win. It only stated the total amount is above $5 million.
Class action cases rarely go to trial. Instead, they are technically thrown out by a judge at an early stage. Then, if the issue appears to have merit, the company usually settles with the plaintiffs’ lawyers.
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