Missing $96,000 is your problem, Coinbase allegedly told account holder who had life savings cleaned out

March 7, 2023, 1:59 PM UTC

Coinbase is being sued after allegedly telling a man who said he lost $96,000 on its site to theft that it wasn’t the company’s problem.

In a lawsuit filed on Monday in San Francisco federal court, plaintiff Jared Ferguson detailed how he contacted Coinbase for help after discovering that most of his life savings had been funneled out of his account on the crypto company’s platform.

According to the filing, which was first reported on by Bloomberg, Ferguson alleged he was texted by his cell provider in May, with the message referring to a SIM card change request that he had not submitted.

He restored service to his phone the following day, the lawsuit said—only to find that almost all of his life savings had been wiped out of his Coinbase account.

Ferguson said his account had been emptied in mere hours after being accessed by a new device and from an IP address that had never been associated with his account.

In the court documents, Ferguson argued that Coinbase was responsible for unauthorized withdrawals from user accounts under both state and federal laws. However, according to Ferguson, the company refused to reimburse him for the lost funds.

“Please note you are solely responsible for the security of your email, your passwords, your 2FA codes, and your devices,” Coinbase allegedly told Ferguson in an email.

He argued that the company’s response to the alleged theft “disclaimed any responsibility for the hacking of its customers’ accounts,” and that its security practices fail to notice and stop “obviously fraudulent” transactions.

A spokesperson for Coinbase told Fortune in an emailed statement that its “world class” security team took extensive measures to ensure customer accounts were safe.

“Coinbase also encourages customers to take measures to secure their personal accounts and information outside of Coinbase,” they said. “We educate our customers on how to avoid cryptocurrency scams and report known scams to appropriate law enforcement authorities. Coinbase customers can take additional steps to secure their accounts by taking advantage of the tips we have published in our Help Center.”

Coinbase, like many companies within the cryptocurrency sector, has suffered on the back of the so-called Crypto Winter, which saw a major selloff of digital assets in 2022 that was exacerbated by the collapse of crypto exchange FTX toward the end of the year.

Last month, Coinbase posted a full-year loss of $2.6 billion for 2022, with fourth-quarter revenues plummeting 76% from a year earlier and trading volumes halving.

Shares of Coinbase have fallen 61% over the past year—even after paring some of last year’s massive decline in value.

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