Coinbase recently responded to concerns about account restrictions. They attributed the issue to a rise in fraudulent activities after the U.S. presidential election. The exchange clarified the situation in a social media post on December 8. It denied claims of widespread limitations, calling them misinformation and FUD (fear, uncertainty, and doubt).
Increased Fraudulent Activity and User Growth
Coinbase explained that a surge in user activity led to a threefold increase in fraudulent attempts. This is common during periods of heightened platform activity. The exchange reassured users that its fraud prevention systems prevented millions of dollars in potential customer losses throughout November.
However, these efforts led to more restricted accounts and longer wait times for support. Coinbase stated: “This is causing a minor increase in restricted accounts and elevated CX wait times. Please bear with us and don’t believe everything you see on Twitter.”
Community Pushback Against Coinbase’s Explanation
Despite Coinbase’s explanation, many users and industry professionals have raised concerns. Austin Federa, a former Solana Foundation executive, criticized Coinbase’s claims. He said the issue was more complex than misinformation. He shared his personal experience, including his mother’s account being restricted without clear reason. She had met all compliance requirements.
Federa also expressed frustration with Coinbase’s lack of clarity. Despite contacting staff for help, his mother’s account was flagged for a second time. The restriction period was now twice as long. He stated, “I know a few folks at Coinbase – I ping them asking to help, they intervene… she tries to transfer assets out and boom, flagged again, this time for twice as long.”
Widespread User Grievances and Support for Criticism
Other users shared similar complaints. They recounted experiences of restricted accounts despite following Coinbase’s policies. A community note attached to Coinbase’s post added credibility to these claims, further fueling the backlash.
This criticism follows another controversy. Coinbase was also criticized for restricting accounts of users who accessed the platform through Virtual Private Networks (VPNs).
The post Coinbase faces user backlash over account restrictions amid fraud spike appeared first on CryptoSlate.
