At least $5 million in damages are being sought by the plaintiffs.
Customers of Coinbase who have previously sued the cryptocurrency exchange for unlawful cryptocurrency transfers have persisted in withholding account details in an effort to thwart attempts to transfer their case to arbitration.
The plaintiffs agreed to submit the required information, including emails, usernames, and Ethereum addresses, in exchange for a protective injunction, according to a fresh emergency request filed in federal court.
- The plaintiff claimed in a document filed with the US District Court for the Northern District of Georgia that Coinbase helped a hacker steal $6,000 worth of cryptocurrency from his wallet and send it to an address he had never dealt with before. The documents also revealed that the hackers were able to take $1,000 out of his bank account.
- However, the San Francisco-based cryptocurrency exchange argued that there was no user consensus over whether to insert a clause in the protective order stating that Coinbase hasn’t waived its ability to arbitrate the issue.
- According to Coinbase, it is impossible to match plaintiffs to their individual arbitration agreements without the account details of users.
- The business said in their emergency move from last month,
“The Federal Arbitration Act gives Coinbase the right to require arbitration, and failing to communicate this fundamental information is an inappropriate attempt to weaken that right.”
- A group of cryptocurrency investors sued Coinbase in August, claiming that the company’s inadequate security procedures left user accounts vulnerable to hackers.
- More than 100 Coinbase users, led by Georgia resident George Kattula, filed a lawsuit against the trading site after it arbitrarily barred them from accessing their accounts and money, preventing them from selling underperforming tokens. Apparently, this resulted in financial losses, according to the complaint.
- This past year, Coinbase has been sued for a variety of things, including selling illegal cryptocurrency assets and “materially creating false and misleading assertions.”
Coinbase Stands with Transparency
A growing number of demands for customer data are being made by law enforcement and governmental organizations all across the world, according to Coinbase’s most recent transparency report.
The exchange said that it was investigating the situation and would take legal action against “bad actors” who disobeyed its service regulations or wasted its resources.
Moreover, a study published by Bleeping Computer last year claimed that around 6000 Coinbase customers were affected.
Brian Armstrong, the CEO of Coinbase, recently said that his company is very different from the defunct cryptocurrency exchange FTX and that it doesn’t handle customer funds unless required to do so.