• Coinbase user lost $96,000 due to an SMS prompt message
• Coinbase denies responsibility for failing to flag unauthorized transactions
• Brian Armstrong intends to apply transaction monitoring in compliance with the regulators.
Coinbase User Loses $96,000
A Coinbase user lost $96,000 due to account draining after an SMS prompt message. Jared Ferguson from New York filed a lawsuit against Coinbase in May 2022, when the victim’s account credentials were lost due to a security breach. The hacker drained the plaintiff’s Coinbase account 24 hours after he received a text message prompting him to change his password and failed to blow the whistle on multiple unauthorized transactions during that period.
Coinbase Proclaims Innocence
Coinbase sent an email to the customer blaming them for their losses saying, „please note, you are solely responsible for the security of your email, your passwords, your 2FA codes, and your devices.“ However, Ferguson claims that his account password was changed from a different IP address and device. In 2021 another user had similar losses but Coinbase refused reimbursement for only $7,500.
Unethical Practice Affects Stock Price
This unethical practice often makes Coinbase customer support the target of Crypto Twitter but it also affects its stock price. At press time, Coinbase Global Inc (COIN) costs $62.77 with a 2.7% decline in last 24 hours.
Brian Armstrong Intends To Apply Transaction Monitoring
Beyond that, Coinbase just launched Base Layer-2 blockchain while Brian Armstrong intends to apply transaction monitoring in compliance with regulators. This would help them prevent such losses by customers in future incidents like this one.
In conclusion this case shows how important it is for cryptocurrency exchanges like Coinbase not only protect their customers’ funds but also ensure better practices are implemented so as not be sued by these types of events again in future cases. Furthermore it shows how stock prices can be affected by poor customer service or lack of protection measures taken by companies handling digital assets