Coinbase has recently responded to concerns surrounding account restrictions, attributing the issue to a surge in fraudulent activities following the US presidential election.
In a post made on Dec. 8 on the social media platform X (formerly Twitter), the exchange debunked claims of widespread account limitations as misinformation and fear, uncertainty, and doubt (FUD).
The company highlighted an increase in user activity, leading to a threefold rise in fraudulent attempts—a trend commonly observed during periods of heightened activity. Coinbase emphasized that its fraud prevention systems effectively averted potential customer losses amounting to millions throughout November.
However, these security measures have resulted in more restricted accounts and longer support resolution times. Coinbase explained:
“This is causing a minor increase in restricted accounts and elevated customer experience (CX) wait times. Please bear with us and don’t believe everything you see on Twitter.”
Community’s Reaction to Coinbase’s Explanation
Despite Coinbase’s reassurances, its handling of the situation has been met with criticism from users and industry experts.
Austin Federa, a former Solana Foundation executive, challenged the platform’s assertions, claiming that the issue extends beyond misinformation. He shared personal anecdotes, such as his mother’s account being restricted without clear justification despite complying with all regulatory requirements.
Federa also expressed frustration over the lack of transparency from Coinbase support, noting that the restriction period was extended without explanation. He stated:
“I know a few folks at Coinbase – I reach out to them for help, they intervene… she tries to transfer assets out and gets flagged again, this time for twice as long.”
Other users echoed similar grievances, recounting instances of account restrictions despite following the platform’s guidelines. A community comment attached to Coinbase’s post also corroborated claims of real restrictions, adding weight to the criticisms.
This backlash comes on the heels of another recent controversy where Coinbase faced backlash for restricting accounts of users accessing the platform through Virtual Private Networks (VPNs).
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