How would you feel if you opened a cryptocurrency account, deposited your “coins,” and then found they’d disappeared from your account? And what if you were then told you had to deposit another $830 in cryptocurrency to prove your identity? The complaint for this class action alleges that customers of Coinbase, Inc. have found amounts missing from their accounts or have been locked out of their accounts for months at a time, unable to access their funds.
The class for this action is all current and former Coinbase account users or consumers in the US who registered for a Coinbase account at any time on or after June 4, 2017, who kept funds or cryptocurrency in their Coinbase accounts, and who were prevented from accessing their accounts or deprived of access to their funds or cryptocurrency by Coinbase, for any period of time, and who were damaged by that conduct.
One of the six plaintiffs in this case, Travis Reece, deposited cryptocurrency into his new account with Coinbase around February 2021. When he logged in to the account again, the cryptocurrency was missing. He contacted Coinbase, only to be told he had to transfer into the account approximately 1,400 units of Stellar Lumens cryptocurrency, worth around $830, in order to verify his identity. Reece sent multiple messages to Coinbase’s customer service, asking for other methods of proving his identity, but the complaint claims he had no access to the funds he deposited for several months.
The complaint alleges that Coinbase “holds itself out as a regulated and fully compliant entity,” registered with the Department of the Treasury Financial Crimes Enforcement Network (FinCEN) as a money services business. Its website claims it’s “building the cyrptoeconomy—a more fair [sic], accessible, efficient, and transparent financial system enabled by crypto.”
But the complaint, along with its six named plaintiffs, alleges that the company “prevents its consumers from accessing their accounts and/or funds for arbitrary reasons and arbitrary amounts of time,” often for a month or more. Some then found that cryptocurrency had been removed from their accounts, the complaint says, and others found their “accounts were erased in their entirety.”
Cryptocurrency is volatile, the complaint alleges, with exchange values fluctuating over short periods of time. If customers are not able to access their funds for a long time period, their cryptocurrencies may lose significant value during that time, causing them losses.
The complaint also claims that the Coinbase User Agreement for account holders provides that “Coinbase combines the balance of their customers’ ‘wallets’ and hold[s] such funds in a U.S. FDIC-insured bank, or invest[s] those funds in liquid investments, the interest and earnings from which are solely kept and owned by Coinbase.”
The counts include negligence, breach of fiduciary duty, breach of contract, and conversion, among other things.
Article Type: LawsuitTopic: Consumer
Most Recent Case Event
Coinbase Accounts Inaccessible, Funds Missing Complaint
June 4, 2021
How would you feel if you opened a cryptocurrency account, deposited your “coins,” and then found they’d disappeared from your account? And what if you were then told you had to deposit another $830 in cryptocurrency to prove your identity? The complaint for this class action alleges that customers of Coinbase, Inc. have found amounts missing from their accounts or have been locked out of their accounts for months at a time, unable to access their funds.
Coinbase Accounts Inaccessible, Funds Missing ComplaintCase Event History
Coinbase Accounts Inaccessible, Funds Missing Complaint
June 4, 2021
How would you feel if you opened a cryptocurrency account, deposited your “coins,” and then found they’d disappeared from your account? And what if you were then told you had to deposit another $830 in cryptocurrency to prove your identity? The complaint for this class action alleges that customers of Coinbase, Inc. have found amounts missing from their accounts or have been locked out of their accounts for months at a time, unable to access their funds.
Coinbase Accounts Inaccessible, Funds Missing Complaint