Coinbase addresses misinformation amid allegations of account restrictions

Coinbase has responded to allegations of unfair account restrictions after weeks of heated discourse over X.

The exchange’s support account, @CoinbaseSupport, posted a thread detailing the situation.

Support eliminates FUD

The controversy began after several X users shared screenshots showing Coinbase warnings indicating transaction restrictions.

One user tagged Sean Clarke, host of the G’Day Bitcoin podcast, claiming that their “crypto submissions” were being restricted without warning, prompting them to consider seeking legal advice. Clarke responded by describing the circumstances as “crazy” and urging others not to use the platform. He noted that the situation is a worrying indication of its current state.

Former NFL player Carlton Mitchell also came forward, sharing that his Coinbase account had faced restrictions twice in one month. The issues included blocked purchases and limitations on sending cryptocurrency.

Another customer reported that they were unable to resolve their account limitations for over a year, claiming that Coinbase’s support team repeatedly advised them to “check back after a month.”

Amid the uproar, Coinbase’s support team tried to clarify the situation. They attributed the rise in restricted accounts to a recent surge in new and reactivated users, especially after the recent election. According to the team, this has coincided with a two- to threefold increase in fraudulent attempts.

Coinbase assured users that its fraud prevention systems are working as intended, saving customers tens of millions of dollars in November alone. However, these systems have also contributed to time constraints and increased customer service wait times.

The support team said: “Please bear with us and don’t believe everything you see on Twitter. They also assured users experiencing restrictions that the platform is actively working to resolve their issues.

Growing threats and criticism of security

Reports of account restrictions coincide with growing security threats targeting Coinbase users. On Saturday night, security researcher under the pseudonym @pcaversaccio shared that several accounts had been drained by attackers impersonating Coinbase support.

The researcher also criticized the platform’s apparent stance on VPN use, calling it a “clown show”. This was after Coinbase Product Manager Scott Shapiro warned people not to use VPNs when accessing the platform.

In a Dec. 3 post on X, he explained that they are often used by attackers, which can raise red flags within the platform’s risk models.

Another person criticized the advice, questioning whether Coinbase was seriously asking people to compromise its security measures, calling it misguided and urging the company to reconsider its position.

However, Shapiro clarified that using a VPN or ad blocker alone would not result in an account being flagged.

He explained that these tools, combined with other suspicious activities, such as logging in from an unknown device in a new country and trying to send large amounts of cryptocurrency to an unknown address, can trigger additional security reviews.

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