A group of investors that filed a class-action lawsuit against popular digital currency exchange Coinbase are now withholding their account information as a means of preventing their case from moving into arbitration territory. They want to see their situation escalate to the American court system and placed before a judge.
Could Coinbase Find Itself in Court?
The customers allege that the security measures initiated by Coinbase against hackers and cyberthieves were weak and resulted in the loss of funds. In addition, they say Coinbase has worked hard not to compensate those who have fallen victim to criminal activity.
One plaintiff mentioned in the lawsuit says that he had $6,000 in crypto funds illegally taken from his wallet and moved to an address that wasn’t his. He also alleges that Coinbase did nothing to prevent the hackers from accessing his banking data, and that they stole another $1,000 from his bank account.
After calling the institution and reversing the transaction, he was able to receive his funds back, though Coinbase locked his account and cited a negative balance in his wallet. The complaint was filed in the U.S. District Court for the Northern District of Georgia. It alleges that Coinbase does not use “standard practices” to keep its customers protected, nor does it reasonably allow customers access to their accounts on a permanent or at least extended basis.
Coinbase, like many digital currency enterprises, has had a very hard time as of late due to the ongoing bearish conditions of the crypto space. The exchange initially announced that 2022 was going to be a year of hiring new personnel and adding to its growing roster of staff members, though this plan became frozen in place when bitcoin started losing value very quickly last year.
Things then took a turn for the worse when the exchange said it would be laying off about 18 percent of its staff, claiming it could not keep up with the ongoing volatility and thus could not afford to pay all the required salaries giving how tied it was to BTC, which was falling faster than anyone could have predicted.
Still, however, the company has garnered a certain degree of support from crypto heads such as Cathie Wood of Ark Invest fame. Not long ago, Wood decided to double down on her ownership of Coinbase stock and purchased several more shares given that they had dipped dramatically from where they were when the company first went public on the Nasdaq in April of 2021.
Wood Still Predicts Big Things for the Firm
Explaining her decision, Wood wrote in a statement:
To the extent investors have reserves of cash to put to work, ARK believes that this time will be no different and that innovation strategies will be prime beneficiaries when equity markets recover.
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