Coinbase is in hot water after close to 100 customers have filed lawsuits against the western hemisphere’s largest digital currency trading platform.
Customers Are Angry with Coinbase
These customers are accusing Coinbase of turning a blind eye to a scam that ultimately cost them more than $21 million in digital currency funds. The problem stems from the Coinbase Wallet, which last fall, directed users upon being downloaded to fraudulent or phony websites that allowed scammers and hackers to take control of their accounts and move their digital assets into wallets they owned.
At press time, due to the terms and conditions enforced by Coinbase, none of the lawsuits in question have resulted in defendants or plaintiffs going to court. Rather, everything is being handled through an arbitration process. This ensures the details stay out of the media and that suits occur through private means between the company and those affected. The legal disputes are heard by a neutral decision maker who then decides which party deserves a ruling in their favor.
In the arbitration demand, the customers allege Coinbase knew full well what was going on with its wallet app and that executives did nothing to handle it or bring the damage to a minimum. They took several attempts to warn Coinbase heads about what was going on, yet little was done to acknowledge their concerns or the money they had lost. Now, these individuals are taking stronger means of getting their money back and delivering justice to themselves.
To say it’s been a rough year for Coinbase would be something of an understatement. 2022 has been marred with digital currency-based problems for everyone, though Coinbase has arguably been more affected than others. What was initially supposed to be a year for mass hirings and bringing staff numbers to new levels eventually became a time when not only were all hiring plans frozen in place, but the exchange later announced it was going to be laying off roughly 18 percent of its staff to deal with the crypto windfall the space had been enduring.
The Company Has Had a Hard Year
On top of that, the company has seen its stock shares crash and burn in recent weeks given how tied up it is with bitcoin, the world’s largest and most popular cryptocurrency by market cap. The asset has lost more than 70 percent of its value over the past 12 months, and with bitcoin losing so much in such a short period, the digital currency exchange is experiencing similar results.
When the company first went public in April of 2021, shares were priced at more than $300, though those same shares have since fallen into the $50 range. It’s a sad and ugly sight to see. Coinbase is also the subject of a new SEC investigation.