Coinbase Slammed With Class Action Lawsuit Over Security Issues

Investors who claim that Coinbase failed to adequately secure user accounts have filed a class action lawsuit against cryptocurrency exchange Coinbase Global (COIN).

Security Imperfection

The action, filed in the U.S. District Court for the Northern District of Georgia, asserts that Coinbase’s trading platform’s inadequate security procedures exposed investors to theft and unlawful transfers.

More than $5 million US in damages is sought in the class action lawsuit that was filed in Georgia.

Disgruntled investors have filed multiple lawsuits against Coinbase, the first cryptocurrency exchange to go public in the United States. One such class action lawsuit was recently filed in New Jersey and claims that the business permitted users to trade unregistered securities on its platform.

Users Locked Out

More than 100 people are parties to the Georgia action, which highlights a 2019 instance in which Coinbase allegedly repeatedly followed a pattern of delaying client access to their accounts by more than six months.

In addition, the complaint alleges that Coinbase broke the law by listing securities on its bitcoin trading platform, causing consumers financial harm by repeatedly locking them out of their accounts.

The price of a share in Coinbase is down 72% year over year to $71.47.

“This is a class action brought by a plaintiff on behalf of all Coinbase wallet and account holders who have had their accounts compromised and suffered losses due to the unauthorized transfer of assets,” the complaint filed with the court reads. “This includes the unauthorized transfer of “crypto” securities listed on the exchange platform without a registration statement, without Coinbase having registered as a broker or dealer, and without their having registered as a securities exchange.”

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