Cryptocurrency trading is no longer a fringe means of investing. Digital coins such as Bitcoin, Ethereum, Tether, Solana, Cardano and others, are increasingly popular with mainstream investors. In recent years, many investors have turned to online trading platforms to take advantage of the favorable returns offered by crypto markets. Enter the San Francisco-based company, Coinbase.
Coinbase aggressively markets its services to users—and potential customers looking to enter the cryptocurrency world—as a safe and user-friendly platform for customers to store and trade cryptocurrencies. But in many ways, Coinbase has lulled account holders into a false sense of security. As a result of its meteoric rise, Coinbase has been plagued by numerous bugs, inefficiencies, and security breaches—from users being indefinitely locked out of their accounts, to wire transfer transfers where customer funds “disappear,” to outright theft.
Coinbase has thus far prioritized growth over protecting its customers’ assets or complying with state and federal law. As a result, numerous Coinbase customers have become victims of sophisticated phishing scams and of hackers who exploit Coinbase’s lax safeguards. Scammers recently gained unauthorized entry into Coinbase customers’ accounts, draining them of all funds.
The first step an investor should take upon realizing their account was hacked is to notify Coinbase immediately. From there, the investor may consider hiring an attorney to represent them against Coinbase in an attempt to recoup their losses due to Coinbase’s failures. Coinbase—and other cryptocurrency trading platforms like it—is a regulated entity obligated to prevent fraud on its platform. It has a duty to (1) protect customer accounts from unauthorized access, (2) flag suspicious transactions, and (3) prevent fraudulent transfers. When it fails, Coinbase may be required to reimburse customers for their losses.
In opening Coinbase account, investors are required to sign a “Coinbase User Agreement” which dictates that disputes by investors may not be filed in court but, rather, must be filed in arbitration. Accordingly, it is important to retain an attorney to recover your losses who has experience representing investors in arbitration actions.
If your Coinbase account was hacked and your money stolen, through a phishing scam, SIM swap or otherwise, the attorneys at ChapmanAlbin may be able to help you. For 25 years, ChapmanAlbin has assisted investors in recouping losses due to misconduct, theft and fraud. Please contact us for a free consultation to discuss whether you have a claim against Coinbase to recoup your losses.
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