Crypto: Class Action Claims Coinbase Failed to Protect Against Unauthorized $50K Ethereum Purchase

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A Dallas consumer has filed a proposed class action in which he alleges Coinbase failed to safeguard his account against unauthorized cryptocurrency transactions and then locked him out of the account for roughly two months. 

The 12-page lawsuit against Coinbase Global, Inc. claims the cryptocurrency exchange breached its contract with the plaintiff by failing to properly secure his account and allowing it to be “pillaged by an unauthorized individual or entity.” 

“At all relevant times, Coinbase had a duty to Plaintiff and the putative class wherein it would properly secure their private information and cryptocurrency from unauthorized transactions and dissemination,” the complaint, filed in California on November 8, alleges. 

According to the case, although Coinbase has represented that it maintains appropriate physical, technical and administrative safeguards to protect users’ account security and confidentiality, the pilfer of funds from the plaintiff’s account indicates otherwise.

Per the complaint, the plaintiff, who regularly traded in the Bitcoin, Ethereum and Dogecoin cryptocurrencies, logged into his account on July 19, 2021 and found that a purchase of $50,000 of Ethereum had occurred. The plaintiff did not make this purchase or consent to have any other person or entity make it, the suit says.

On the same day, the plaintiff logged into his Bank of America account to investigate whether the $50,000 used to buy Ethereum was actually deducted from his account and found that it was, which caused the man “great stress and worry,” the lawsuit relays. 

After the plaintiff lodged a complaint with Coinbase, the exchange locked the man out of his account for approximately two months, according to the case. 

The lawsuit looks to represent all persons in the United States and its territories who, within the last four years and through the date of resolution of the case, had a Coinbase account that was breached by a source other than the accountholder.

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