Updated: Sep 13
Thousands of dollars in cryptocurrency have been lost from user accounts due to cybersecurity flaws at Coinbase, according to a class-action lawsuit against the cryptocurrency exchange, which also accuses the company of not doing enough to stop more thefts.
According to the lawsuit, which was submitted on Tuesday to the U.S. District Court for the Northern District of California, while Coinbase charged clients a large amount of money to secure their accounts, it did not shield them from having their funds stolen. Customers' bitcoin holdings are held by Coinbase, which also offers a platform for trading cryptocurrencies.
According to the lawsuit, Coinbase is the biggest cryptocurrency exchange in the US, with 98 million verified users and billions in customer assets. Every quarter, it processes trades worth more than $309 billion. The lawsuit claimed that Coinbase and Coinbase Global broke both California law and the federal Electronic Fund Transfer Act.
Manish Aggarwal, the primary plaintiff in the complaint, who had $190,000 stolen from his cryptocurrency accounts in April, is one of those who blamed Coinbase's lax security for his losses. According to Aggarwal's attorneys at Braunhagey & Borden, the company has declined to pay him back.
According to the lawsuit, Coinbase's advertisements claimed that it offered "industry-leading security," including encryption, and "best in class storage" for digital assets. On its website, the business asserted that it had "never been hacked."
However, the lawsuit claimed that in spring 2021, 6,000 users had their cash stolen as a result of a security breach that took advantage of a flaw Coinbase was aware of. According to the lawsuit, Coinbase lied that it had rectified its security flaws following the incident because user accounts had been compromised through at least July 2022.
Contrary to claims made on its website, the company's customer care did little to help clients whose accounts were hijacked, the complaint claimed. Following the incident, Aggarwal claimed he attempted to contact Coinbase customer service but was continually directed to a recorded message.
According to the lawsuit, Aggarwal and other plaintiffs are requesting restitution, damages, costs, and other relief.
By fLEXI tEAM