Coinbase Addresses User Complaints Over Account Restrictions and Fraud Issues
Coinbase has responded to customer complaints on its X account regarding sudden account restrictions, stating that it is addressing these concerns and working to resolve the issues.
Reports indicate that Coinbase users have been targeted by hackers. A security researcher known as pcaversaccio highlighted on X that young hackers impersonated Coinbase's support team to deceive users and access their accounts. Additionally, crypto commentator Sean Clarke warned users to avoid Coinbase, claiming the platform became unavailable during a market surge, hindering access to self-custody of Bitcoin.
Coinbase Explains Account Restrictions
Coinbase has dismissed claims of account restrictions as exaggerated or misrepresented, labeling them as fear, uncertainty, and doubt (FUD). The exchange noted an increase in new users and reactivated accounts since the last US election, which coincided with a rise in fraudulent activity. Coinbase emphasized that its fraud prevention system remains effective, having saved customers from losing tens of millions of dollars in November.
“We’ve seen a surge of new users and old users re-activating their accounts post-election… along with this surge, we’ve seen a 2-3x increase in fraudulent attempts… our fraud-prevention systems are acting as expected and have saved customers tens of millions in losses in November alone.”
Coinbase acknowledged that increased fraudulent activity has led to more restricted accounts. It urged users to remain patient and be cautious about rumors circulating on X, assuring affected users that their issues would be resolved soon:
“This is causing a minor increase in restricted accounts and elevated CX wait times. Please bear with us and don’t believe everything you see on twitter.”
VPN Policy Sparks Debate
Coinbase has cautioned users against using VPNs to log into their accounts, citing that attackers often use this method to steal funds. Product Director Scott Shapiro stated that the exchange’s risk model flags VPN usage as suspicious, even for legitimate users. This stance has drawn criticism, with pcaversaccio arguing for the importance of VPNs in protecting privacy and security, especially when using public Wi-Fi.
Similarly, Kraken's chief security officer Nick Percoco criticized Shapiro's statement, emphasizing that crypto users prioritize privacy and security. He pointed out scenarios where accessing a crypto exchange without a VPN could pose risks and criticized Coinbase for forcing users to choose between financial freedom and physical safety.