Bitcoin Exchange Coinbase Faces Consumer Class-Action Complaint
The cryptocurrency market is in hot water again, exacerbating an already tenuous relationship with customers. A class action lawsuit has been filed against San Francisco-based Coinbase in recent times in the US Court for the Northern District of California, asserting the top US cryptocurrency exchange unlawfully kept cryptocurrencies that were sent by email and left unclaimed for years.
Plaintiffs Timothy G. Faasse and Jeffrey Hansen are US residents and filed the complaint on behalf of themselves and others, that are anticipated to be in thousands, all of whom are being represented by Restis Law in San Diego.
William R. Restis of the law firm that bears his name told CCN:
«These types of issues are simply growing pains for a maturing industry that's moving to the mainstream. Coinbase's failure to deliver was likely an oversight. Hopefully, this lawsuit spurs the company to rapidly make things right.»
As far as lawsuits go, this one is not that hostile. Both plaintiffs say they will use Coinbase if their bitcoins are restored.
The BTC cost mostly traded under $1,000 in 2013 until year-end, in which time it had a short spurt trading above $1,000. The pair did not claim their funds until this year amid a reminder but were met with a faulty connection, that would not let them redeem the funds.
According to the filing, Coinbase's egregious behavior is comparable to a bank maintaining funds from an uncashed cashier's check. In the case of Coinbase, users may send bitcoin, Ethereum, Litecoin and Bitcoin Cash by email, informing the recipient they are getting the funds and providing a link whereby they can create their own user account to redeem funds.
Unfortunately a number of these emails went overlooked before the rise of cryptocurrencies in 2017. Rather than returning the funds back to their original owners, the exchange held onto them, the lawsuit alleges.
California's real estate law is on the side of the shareholders, the lawsuit states.
«This class action seeks to recover these unclaimed cryptocurrencies and send them to the intended recipients, in addition to all „forks“ thereof (e.g. Bitcoin Cash fork of Bitcoin) and „airdrops“ related thereto,» the lawsuit states.
What Coinbase must have done, according to the complaint, is to notify the recipients of the newfound bitcoin within 2.5 years of when the funds were received that when left unredeemed, their cryptocurrencies plus dividends and interest would be sent into the state of California. Plaintiffs, whose email addresses have since «gone stale» want their assets turned over to the nation.
Coinbase's email feature is a convenient way to send cryptocurrencies like bitcoin, especially for different members of the exchange for whom funds are automatically deposited into their accounts. For non-users, however, it is another story, and the most recent allegations shine a spotlight on another possible flaw in the Coinbase infrastructure.
Additionally, it opens the door for similar suits to emerge among users at other exchanges where cryptocurrency funds have yet to be maintained.
Coinbase, meanwhile, just recently faced a similarly sensitive situation in which it blamed a tech glitch at Visa for unauthorized charges that the market has pledged to reverse.