Coinbase Users Sue Company for $21M Crypto Scam Negligence

A group of nearly 100 Coinbase users has filed a lawsuit against the company, alleging negligence after being collectively scammed out of $21 million through the Coinbase Wallet. According to the suit, scammers exploited a vulnerability in Coinbase Wallet's security that allowed them to gain control over users' funds without explicit authorization. The scammers targeted users through social media and other platforms, persuading them to download the Coinbase Wallet and invest in fraudulent “liquidity mining” schemes. The deceptive transactions used smart contracts that appeared legitimate but ultimately gave scammers unfettered access to users' wallets.

Attorney Eric Rosen who is now a parter at Dynamis LLP, criticized Coinbase’s lack of prompt action. He argued that Coinbase ignored warnings about the security flaw, which allowed the scam to persist and victimize more users. Rosen stated, "They didn’t even appear to try," highlighting Coinbase’s alleged indifference to reports of fraud. Users claim Coinbase’s customer service was insufficient, providing only automated responses that often blamed users for the losses instead of investigating the security breach or removing the scam-related decentralized apps.

Coinbase has since updated its security notifications, but many users believe this response came too late. They argue that timely action could have prevented significant losses. The lawsuit seeks financial compensation and requests that Coinbase take accountability by identifying and supporting other affected users. If successful, this case could inspire further actions by crypto users impacted by similar schemes.