Coinbase CSO responds to dollar5 million lawsuit claims
Categories: Crypto News
Coinbase CSOresponds to dollar5 million lawsuit claims
Popularcrypto exchange Coinbase is being sued by a group of investors after allegedclaims of poor security practices came forward. The investors are claiming thatCoinbase has exposed its accounts to potential hackers, as it didn’t have thenecessary security controls in place.
In relationto this news, the exchange’s Chief Security Officer Phillip Martin has issued astatement to British news tabloid ‘The Evening Standard’.Martin alsoexpressed that such events are mostly down to the lack of user awareness.He emphasized that the platform has all required security controls to preventillicit access and exfiltration of user funds. However, the overall securityposture of a crypto exchange depends on the user, as much as it does on theorganisation.
AlthoughMartin denied any direct statement regarding the lawsuit, he implied thatinconsistent and irresponsible handling of digital assets can lead to threatactors exploiting vulnerabilities. Through this statement, the companyindirectly shifted the blame to the affected users, rather than taking on anyliability in relation to the lawsuit.
The lawsuitis being led by a Georgia state resident named George Kattula, and over 100Coinbase users have filed a class action lawsuit against the company in the USDistrict Court. The users are accusing the company of illegally lockingtheir accounts, and restricting them from selling their underperforming assets.This eventually led to the users experiencing significant losses after thecrypto market suffered massive liquidation last week.
According tothe leading plaintiff Kattula, he opened an account with the exchange earlierthis year and purchased around $6,000 worth of different tokens. Three monthslater, a hacker was able to access his account and steal all funds. Coinbasewas only able to recover $1000 worth of his funds. The exchange has sincedeemed the remaining assets “unrecoverable”.
Althoughbitcoin and other digital assets have soared into popularity and adoption inrecent years, the larger crypto market still remains unregulated in mostcountries. Also as the whole decentralized space is still relatively a newinnovation, conventional security solutions and controls are not able tosafeguard such platforms from sophisticated attacks.
Cryptohacks have recently become common news every month. In June, hackers stole $100million worth of cryptocurrencies from Harmony’s blockchain bridge. This month, the Nomad blockchainbridge suffered a $200 million hack. Also, major crypto lending network Celsiusfiled for bankruptcy earlier this year, following a massive $120 million lastDecember.