Coinbase is in hot water after nearly 100 clients filed lawsuits against the largest cryptocurrency exchange in the Western Hemisphere.
Customers are angry at Coinbase
These customers accuse Coinbase of turning a blind eye to a scam that ultimately cost them more than $21 million in digital currency money. The problem stems from the Coinbase Wallet, which last fall directed users upon downloading to fraudulent or fake websites that allowed scammers and hackers to take control of their accounts and transfer their digital assets to wallets they owned.
At the time of publication, due to the terms and conditions imposed by Coinbase, none of the lawsuits in question have resulted in defendants or plaintiffs going to court. Instead, everything is handled through an arbitration process. This ensures that details are kept out of the media and that litigation takes place through private means between the company and those affected. Legal disputes are heard by a neutral decision maker who then decides which party deserves to rule in its favour.
In the arbitration request, the clients claim that Coinbase knew full well what was going on with its wallet app and that the executives did nothing to deal with it or minimize the damage. They made several attempts to warn the heads of Coinbase about what was going on, yet little was done to acknowledge their concerns or the money they had lost. Now, these individuals are taking stronger means to get their money back and get justice for themselves.
To say it’s been a tough year for Coinbase would be an understatement. The year 2022 has been marred by crypto-based woes for everyone, though Coinbase has been affected the most. What was initially supposed to be a year of mass hiring and raising employee numbers to new levels eventually became a time when not only were all hiring plans put on hold, but the exchange later announced that it would lay off nearly 18 percent of its staff. Staff to deal with the cryptocurrency sudden gains that the space has been going on.
The company has had a difficult year
Moreover, the company has seen its shares crash and burn in recent weeks due to how closely it is tied to bitcoin, the world’s largest and most famous cryptocurrency by market capitalization. The asset has lost more than 70 percent of its value over the past twelve months, and with bitcoin losing so much in such a short period, the cryptocurrency exchange is seeing similar results.
When the company first went public in April of 2021, shares were priced at over $300, though those same shares have since fallen into the $50 range. It is a sad and ugly sight to see. Coinbase is also the subject of a new SEC investigation.