Crypto Investors Sue Coinbase Over Poor Security

Being the victim of a hack is never fun, especially when money is involved. That’s exactly what happened to some Coinbase customers. A group of more than 100 exchange customers have decided to sue the company for poor security.

Coinbase is not secure enough

In the charge can be read that the accounts of some users have been hacked, and that this is due to a lack of security. Subsequently, Coinbase did not allow customers to access their accounts in certain cases. That sometimes took a very long time.

After one alleged hack in 2019, it took about six months for the customer to use the account again. In other cases, the accounts themselves were permanently unusable. Now the market for cryptocurrencies is quite volatile, which is why access to your account is extremely important.

At the same time, Coinbase in its marketing claims that it is an industry leader thanks to top-level security standards, and thus customers can rely on the company. The plaintiffs believe that the trading platform does not live up to these expectations, because otherwise the problems would not have arisen.

Lawsuit with the SEC

Notably, the indictment also alleges that Coinbase would offer securities on the platform. That is something the US Securities and Exchange Commission (SEC) is already looking into. Whether this is actually the case remains to be seen, which is why it is remarkable that it is practically used as a fact at all.

It is a class action case. This means that victims can apply to receive compensation from Coinbase. Should the case be won, the amount Coinbase has to pay will be divided among the victims who have come forward. When the lawsuit was filed, it already represented more than 100 people, but this could be even more.

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