Coinbase's Customers Feel Betrayed and Angry
These consumers are alleging that Coinbase participated in a scheme that defrauded them of more than $21 million worth of digital currency, and that Coinbase ignored the crime. The problem originated with the Coinbase Wallet, which, upon being downloaded by users in the fall of 2017, redirected them to bogus or fake websites. These websites enabled con artists and hackers to take control of the users' accounts and transfer their digital assets into wallets that they owned.
At the time of publication, none of the aforementioned cases have resulted in either the defendants or the plaintiffs going to court because of the terms and conditions that are enforced by Coinbase. Instead, everything is being settled via the use of an arbitration procedure. This assures that the data will not be made public and that any legal action will be conducted in a confidential manner between the affected parties and the firm. A third person who is impartial in the case will listen to both sides of the argument and then decide which side is more deserving of a favorable judgement.
The customers allege in their demand for arbitration that Coinbase executives were aware of what was going on with its wallet app but they did nothing to handle the situation or minimize the amount of damage that was caused. They made many attempts to alert the leaders of Coinbase to what was going on, but little little was done to address either their worries or the money that they had lost. These people are now employing more forceful strategies in order to retrieve their lost money and exact revenge on themselves.
It would be something of an understatement to say that this last year has been challenging for Coinbase. Everyone has had difficulties in 2022 that are related to digital currencies, but it might be argued that Coinbase has been more adversely affected than others. What was supposed to be a year of mass hirings and bringing staff numbers to new levels eventually became a time when not only were all hiring plans frozen in place, but the exchange later announced it was going to be laying off approximately 18 percent of its staff in order to deal with the crypto windfall the space had been experiencing. This was a time when all hiring plans were frozen in place.
The Business Has Experienced a Challenging Year
On top of that, the company has seen its stock shares crash and burn in recent weeks due to how closely it is tied to bitcoin, the largest and most popular cryptocurrency in terms of market cap around the world. The value of the asset has dropped by more than 70 percent over the course of the past year, and because bitcoin has also dropped in value substantially in such a short amount of time, the digital currency exchange is seeing results that are comparable.
When the company went public for the first time in April of 2021, shares were priced at more than $300 each; however, since then, the price of those same shares has dropped to the range of $50. The sight is depressing and revolting to behold. A new investigation by the SEC is currently looking into Coinbase as well.