UpdatesMar 07, 2023

They stole all the cryptocurrencies from his account. He is suing Coinbase for $100,000

The account owner claims that he lost almost all his savings as a result of the hack.

One Coinbase account holder has sued the cryptocurrency exchange in an attempt to recover $96,000 which he claims was stolen from him. In turn, the American exchange believes that it is not responsible for losses resulting from the security breach. As stated in the lawsuit, the breach of security is the sole fault of the virtual currency exchange.

Ferguson: Coinbase is responsible for unauthorized withdrawals

Jared Ferguson of Staten Island, New York, says he received a text message from his mobile operator in May asking him to change his SIM card, which he has not yet done. When he restored service on his iPhone with a new card the next day, Ferguson believes he found out that almost all of his life savings had disappeared from his Coinbase account.

Ferguson argues that under state and federal law, Coinbase, which is the largest US cryptocurrency exchange, is solely responsible for unauthorized withdrawals. However, the company in question refused to refund him, claiming in an email that they were responsible for the security of passwords and two-factor authentication codes, according to the lawsuit. Two-factor authentication provides extra security by sending a code, usually to the user's phone or email.

“Remember that you are solely responsible for the security of your email passwords, as well as 2FA codes and other devices,” Coinbase wrote to Ferguson, according to a complaint filed Monday in federal court in San Francisco.

“Coinbase currently disclaims any liability for recent hacks into customer accounts,” Ferguson said.

The victim claims that Coinbase's security procedure does not stop "fraudulent and unauthorized transactions where customers lose funds."

Coinbase ends the year with a big loss in revenue

In recent months, Coinbase has experienced a sharp drop in trading volume on its platform. Both investors and speculators have largely abandoned cryptocurrencies as one scandal after another weakened confidence in digital assets. Coinbase's revenue and trading volume plummeted over the course of 2022, with the company reporting a full-year loss of $2.63 billion.

Coinbase CEO Brian Armstrong announced on Monday, March 6 that L2, known as Base, will likely include both transaction monitoring and anti-money laundering measures. While this network currently has some centralized components, it is expected to become more decentralized as it continues to develop.