U.S.-based cryptocurrency exchange Coinbase has been hit with a class action lawsuit last week over claims the firm allegedly failed to properly secure customers’ accounts, leaving them vulnerable to unauthorized activity.

See related article: Coinbase under investigation by SEC, quarterly report reveals

Fast facts

  • Filed in the U.S. District Court for the Northern District of Georgia last Monday, the lawsuit alleges this caused users financial harm by locking them out of their accounts either permanently or for extended periods of time.
  • Representing a class of more than 100 people, the lawsuit also accuses the firm of violating U.S. federal law by listing securities on its trading platform. Additionally, in one alleged incident in 2019 cited in the lawsuit, Coinbase took over six months to let a customer back into their account, which the complaint claims is indicative of a wider pattern of behavior.
  • Additionally, the suit alleges some of the assets listed on the exchange fit the description for the U.S. Securities and Exchange Commission’s (SEC) definition of a security and as such Coinbase had failed to properly register as a securities exchange with the SEC.
  • The Nasdaq-listed firm is also currently under investigation by the SEC for its token listing processes and staking programs and yield-generating products.
  • Coinbase already has another pending lawsuit which alleges the firm allowed U.S. investors to trade unregistered securities; a shareholder claimed Coinbase misled investors about the company’s public listing; as well as two other separate lawsuits the company pushed to settle through arbitration.
  • Forkast’s request to Coinbase for a comment via email outside of normal U.S. business hours was unanswered at the time of publication. 

See related article: BlackRock, Coinbase partner to extend crypto trading to institutional investors