Coinbase Faces Backlash for Failing to Compensate Customers Affected by Security Breach

Coinbase, the largest cryptocurrency exchange in the United States, is currently embroiled in a dispute with a hacking victim over a security breach that led to customer losses.

Bloomberg reported on March 7 that the company had refused to take responsibility for the incident or refund the affected account holder. Jared Ferguson, a resident of New York, lost $96,000 in May 2022 and subsequently sued Coinbase.

Ferguson claims that Coinbase’s security measures failed to flag “obviously fraudulent and unauthorized transactions,” resulting in his account being drained within eight hours.

He received an SMS message from his mobile carrier about a SIM card change request that he didn’t make, which was followed by the depletion of his Coinbase account, containing almost all of his life savings. He believes that Coinbase is responsible for unauthorized withdrawals under state and federal laws.

However, Coinbase has denied any wrongdoing, stating that “Please note you are solely responsible for the security of your e-mail, your passwords, your 2FA codes, and your devices” in an email to Ferguson.

The company has previously been criticized for its lack of customer support, and this incident has only added to its woes.

It is worth noting that this is not the first time that Coinbase has faced such allegations. In 2021, another victim lost $7,200 from a Coinbase account in a SIM swap attack, and the company refused to reimburse the losses.

The case highlights the importance of cybersecurity measures and the need for vigilance when it comes to protecting personal information and assets.

As the popularity of cryptocurrencies grows, so too do the risks associated with them. It is incumbent upon exchanges such as Coinbase to provide robust security measures to protect their customers’ assets and to take responsibility when those measures fail.