Coinbase addresses user concerns over account restrictions, attributing them to a rise in fraud attempts alongside growing user activity.
By Temitope Olatunji
Edited by Julia Sakovich
Updated
3 mins read
Coinbase has addressed claims from customers on its X account regarding sudden account restrictions. The exchange stated that it is not ignoring these complaints and assured users that its team is working diligently to resolve the issues.
There have been various reports of Coinbase users being targeted by hackers. A pseudonymous security researcher with more than 20,000 followers pcaversaccio stated on X that some young hackers have impersonated Coinbase’s support team to trick users and drain their accounts. On September 28, a crypto commentator, Sean Clarke, warned users to stop using Coinbase. Sean claimed that the exchange became unavailable during a market surge, preventing users from accessing self-custody of their Bitcoin.
Coinbase has dismissed these allegations, asserting that claims about the exchange restricting user accounts are being exaggerated or misrepresented, labeling them as FUD.
Coinbase explained that since the conclusion of the last US election, the number of new users has increased, along with old users reactivating their accounts. As user numbers have grown, there has also been a rise in fraudulent activity. The exchange assured users that its fraud prevention system remains vigilant, citing its previous achievement of preventing customers from losing tens of millions of dollars in November. The exchange remarked:
“We’ve seen a surge of new users and old users re-activating their accounts post-election… along with this surge, as is typical with surges, 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 the rise in fraudulent activity has contributed to the increase in restricted accounts. The platform urged users to remain patient and avoid believing all the rumors circulating on X, assuring affected users that their issues would be addressed soon. It added:
“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.”
Coinbase has warned users against using VPNs to log into their accounts, citing it as a common technique used by attackers to steal funds. Coinbase Product Director Scott Shapiro explained that the exchange’s risk model flags VPN usage as suspicious, even for legitimate users. Many have criticized this stance against VPN usage. Pcaversaccio dismissed Shapiro’s opinion and emphasized the importance of VPNs for protecting privacy and security, particularly when using public Wi-Fi or avoiding government/ISP tracking while accessing Coinbase accounts.
Similarly, Kraken’s chief security officer, Nick Percoco, criticized Shapiro’s statement, noting that crypto users prioritize privacy and security. He mentioned several scenarios where accessing a crypto exchange without a VPN could expose users to risks. He further criticized Coinbase for forcing users to choose between financial freedom and physical safety.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Temitope is a writer with more than four years of experience writing across various niches. He has a special interest in the fintech and blockchain spaces and enjoy writing articles in those areas. He holds bachelor's and master's degrees in linguistics. When not writing, he trades forex and plays video games.
