A group of investors is suing Coinbase for allegedly weak security measures. Investors allege the absence of security safeguards at Coinbase as a reason for hacking its accounts.
In an interview with ‘The Evening Standard,’ Phillip Martin, the exchange’s chief security officer, said, “There are threats of all sizes against protocols, hackers seeking to exploit smart contract flaws. In order to stay ahead of the curve, my team has built an organisation.
1/ As promised, I’m now able to share an update on this investigation. As I noted previously, this kind of investigation is not quick, but is critical to maintaining a level playing field. https://t.co/0O5BBBRidk
— Philip Martin (@SecurityGuyPhil) July 21, 2022
In Martin’s opinion, such situations are the result of user ignorance. In his opinion, the platform has the necessary security procedures to prevent user money from being stolen. In general, crypto exchange security depends on the user and the organisation.
Although Martin declined to comment directly on the case, he suggested inconsistent and negligent handling of digital assets might allow threat actors to exploit weaknesses. In this statement, the corporation implicitly blames the impacted consumers rather than taking responsibility for its legal actions.
Who sued Coinbase?
More than 100 Coinbase customers have filed a class action lawsuit against the company. Users claim that the firm improperly froze their accounts and prevented them from selling their assets. The Crypto market meltdown last week caused severe losses for users.
According to the complaint, Coinbase does not follow established security measures. There are allegations that the exchange suspends bitcoin withdrawals without notice and sells options without warning.
As per Kattula, he established an account with the exchange and purchased tokens worth $6,000 on the exchange. Three months later, his money was stolen by a hacker. A mere $1000 was recovered by Coinbase. The remaining assets are deemed unrecoverable by the exchange.
Coinbase finds itself in legal trouble for listing hundreds of new currencies without knowing their legal status, regardless of the case’s merits. Hundreds of other crypto assets trade daily that don’t require registration, including some that are securities and others in a grey area. SEC authorities have said Bitcoin and Ethereum aren’t securities and don’t need to be registered.
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