A Coinbase customer is seeking $5 million in a class-action lawsuit against the American cryptocurrency exchange for allegedly failing to secure customer accounts and “disrespecting” federal securities laws, among other allegations.
The lawsuit, filed last week and representing more than 100 people, alleges that the largest US crypto exchange has blocked users from accessing their accounts for long periods of time — harming them financially.
Open in a court in the US state of Georgia, author George Kattula also alleges that Coinbase failed to report that the cryptocurrencies on its platform are securities, which “boldly flout federal and state laws.”
“Contrary to its statements, Coinbase does not properly implement standards practices to keep customer accounts secure,” the lawsuit states. “And Coinbase inappropriately and unreasonably prevents its customers from accessing their accounts and funds, whether for extended periods of time or permanently.”
The authors allege that the exchange plummeted in times of market volatility — something that actually happens with crypto exchanges — which would have made it difficult for users to withdraw their money. “User growth at Coinbase has outpaced its ability to provide services and account protections that are promised to customers,” the lawsuit adds.
The suit also claims that the plaintiffs’ assets were “vulnerable to theft.”
Lawsuits against Coinbase
Recently, the largest US crypto exchange has been the target of numerous lawsuits from disgruntled customers. This month, the broker asked the US Supreme Court for emergency intervention to submit two newly opened cases to arbitration.
Meanwhile, the US Securities and Exchange Commission (or SEC) is investigating the company for allowing US citizens to trade in unregistered securities, according to an article published by the news agency. Bloomberg at the end of July.
The news follows civil and federal allegations against a former Coinbase product manager accused of operating an insider trading scheme.
In its indictment, the SEC stated that the exchange has a number of unregistered securities available on its platform.
*Translated by Daniela Pereira do Nascimento with permission from decrypt.co.
