Coinbase has addressed a spate of recent customer account restrictions over in a multi-tweet thread on the exchange’s support account over on X.
Over the weekend, many Coinbase users had taken to X to report account restrictions. Coinbase (@CoinbaseSupport) flippantly started its thread by implying that many of the complaints were “FUD/misinformation”, a claim that X crypto fact checkers quickly took to task.
In its thread, Coinbase attributed the restrictions to “a surge of new users and old users re-activating their accounts post-election.” The exchange then elaborated: “Along with this surge, as is typical with surges, we’ve seen a 2-3x increase in fraudulent attempts.”
In a later tweet in the same thread, the exchange claimed its fraud prevention systems have saved “ten of millions” in losses for Coinbase customers.
Is Coinbase restricting accounts using VPNs?
In what seems like a bit of foreshadowing, last Monday, Coinbase’s Product Director, Scott Shapiro, told followers on X: “PSA: Don’t use a VPN to access Coinbase.” He explained that the exchange’s security software flagged up VPN users as a potential risk, because “attackers always use VPNs” [emphasis in original].
Many readers reacted sharply to the tweet, with some calling it a troll post. They reminded Shapiro that he was implying Coinbase expects its customers to forego their personal security measures just to use the platform. Shapiro doubled down in his replies to the tweets and two days later posted a tweet thread acknowledging his prior post was “poorly worded”.
Shapiro then clarified that Coinbase believes “privacy is a fundamental right” and the company “will not stop until we perfect this experience for our users.”
However, this did not appease every reader. Four days later, crypto security researcher @pcaversaccio wrote a scathing critique of Shapiro’s proposal and highlighted the fact that there have been frequent cyber attacks on Coinbase customers recently.
He said Saturday was particularly notable for attacks by “Skiddies” (an abbreviation of “script kiddies”, or hackers who use ready-made scripts to attack people).
Coinbase in other news…
As a publicly traded company and the second largest exchange in the world, Coinbase leads the drive for regulatory clarity around crypto, both on US home soil and around the world.
This month alone, the company made several key headlines. Last Monday, Chief Policy Officer, Faryar Shirzad predicted that the incoming pro-crypto Trump administration would fast-track US crypto regulations by helping two bill through Congress.
Firstly, there’s the Financial Innovation and Technology for the 21st Century Act, which seeks to establish a comprehensive legal framework for digital assets. The bill has already passed in the House of Representatives and awaits further action in the Senate.
Secondly, the Clarity for Payment Stablecoins Act has not yet advanced to a House vote, but given the growing use of stablecoins, Shirzad highlighted the urgency of a rapid regulatory response to govern them.
Finally, a Coinbase-led travel group that includes Kraken, Gemini and Revolut just announced TRUSThub. Set to launch by the end of 2024, the new tool is designed to help virtual asset service providers like those named above to meet Travel Rule compliance requirements.
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