In a report published by the New York Times last March 24, Coinbase users around the world sought help after their accounts were allegedly hacked and their money drained. However, the victims came forward and said that Coinbase is not doing anything to help their situation.
According to a New York Times article written by Kellen Browning, one of the victims was Michael Pierre, a lawyer and previous Coinbase employee. In 2020, he received a text message from an unknown number that was immediately followed by a loss of cell service.
Suspecting that he was being hacked, Pierre immediately tried to log in to his Coinbase account that held assets worth US$100,000. When he couldn’t, he turned to Coinbase for help.
The crypto startup later responded that it was an ‘attacker’ who changed his password and drained his account. He then told Coinbase that he was shocked because their security should have foreseen threats and stopped them.
Moreover, when Pierre reached out to a former colleague in Coinbase to look into the case and compensate him for the funds he lost, he said that he was given little assistance.
In January 2021, Pierre sued Coinbase for negligent security measures and failure to protect his assets. The digital coins he lost from the attack would have been worth more than US$400,000 today.
‘I was thinking about retirement, family, having money for those rainy days. And within a couple of minutes, it was all taken away from me,’ Pierre told the New York Times.
Vice president for Coinbase’s customer experience Caspar Sorensen released a statement saying the company is working with a ‘24/7 crypto economy, which, combined with a substantial increase in demand, has created a unique set of customer experience challenges.’
When asked about any individual cases they were handling or litigation, Coinbase representatives did not comment. However, they say that 0.004% of their customers experienced ‘account takeovers’ and were educated on how to keep their accounts secure from phone-based attacks.
The incident raises concerns at a crucial time as Coinbase prepares to file for a public offering this year.
The crypto startup has been steadily improving since it was first launched in 2012 by CEO Brian Armstrong. Last year, Coinbase boasted 43 million customers and an estimated $322 million profit.
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