Coinbase faces another class action lawsuit over its poor security as more customers cite concerns over account confidentiality and security of their digital assets amid a tainted image of the crypto exchange.
Popular cryptocurrency exchange, Coinbase, was slammed with a class action lawsuit over poor security on its platform.
The lawsuit claims that the firm allegedly failed to properly secure customer data that left users vulnerable to unauthorized activity and malicious intent.
The class action lawsuit
The lawsuit alleges that some assets listed on the exchange fit the SEC’s description of the security. The Securities and Exchange Commission (SEC) cited that Coinbase failed to register the assets as securities.
The class action lawsuit also alleges that the exchange violated US Federal laws after listing securities on its trading platform.
In addition, in 2019 Coinbase took over six months to let a customer back into their account. The complaint indicates a wider pattern of behavior.
The class action lawsuit was filed in the US District Court for the Northern District of Georgia. The lawsuit claims that Coinbase’s violations caused users financial harm.
The crypto exchange locked users out of their accounts. The move characterized both permanent and extended periods of time.
Coinbase also remains under investigation for its token listing processes. SEC continues to investigate the crypto exchange’s staking program and yield-generating products.
Coinbase and lawsuits
Coinbase sets the tone for a crypto exchange blurred with a lot of regulatory controversies. The exchange faces a pending lawsuit. The lawsuit alleges the firm allowed US investors to trade unregistered securities.
One of the shareholders claimed that Coinbase misled investors. The shareholder believes Coinbase misled investors about the company’s public listing.
The shareholder reiterated that Coinbase artificially inflated the value of the company’s securities. The exchange failed to disclose certain risk factors to investors.
Based on the lawsuit, the company’s stock price plummeted by more than 26.4% in May. The lawsuit argues that in light of these facts, Coinbase directly misled investors. This came after Coinbase’s public statements in the lead-up to its direct listing.
The move caused investors to suffer financial injury when the truth about the incident surfaced.
Will coinbase’s poor security repel customers?
In January, Mr. Pierre, a lawyer, sued Coinbase after the exchange failed to facilitate recovery of his lost funds. Fraudsters hacked into Pierres’s account and stole digital coins worth $100,000.
The former Coinbase employee accused the exchange of negligent security measures. He expected Coinbase’s security protocols to flag any malicious attempts. However, the system failed to protect his digital assets.
His tale serves as one of many customers affected by Coinbase’s poor security. Despite several hacking attempts, Coinbase reiterated that it educated users on security. The exchange claims that it educated all its users on how to keep their accounts secure.
Coinbase continues to appear in the limelight for all the wrong reasons. From class action lawsuits on the listing of tokens to malicious hacks on user accounts.
