ZachXBT Criticises Coinbase Over Account Lockouts and Security Issues
Crypto investigator ZachXBT has called out Coinbase, one of the largest cryptocurrency exchanges globally, over its recurring account lockouts and failure to disclose a data breach.
The on-chain sleuth, known for his detailed investigations into fraudulent activities, expressed his frustration publicly on social media, reigniting concerns regarding the platform’s transparency and handling of user security.
Coinbase’s Lack of Transparency Sparks User Frustration
ZachXBT’s recent comments have reignited widespread backlash regarding Coinbase’s customer service and data protection practices.
In a direct online post, he pointed out:
"You have now locked me out of my account twice in the past month for no given reason (again today). You had customer data leaked you have yet to transparently disclose (lead to thefts)"
His frustration lies not only in the account lockouts but also in the exchange’s failure to address the underlying issues, including a breach that affected users’ data.
Despite acknowledging the platform’s competitive annual percentage return on stablecoin holdings, ZachXBT made it clear that he could no longer recommend Coinbase to others.
His words carry significant weight in the crypto community, given his reputation for uncovering scams and assisting victims in retrieving lost funds.
Coinbase’s Reputation at Risk as Security Concerns Grow
Coinbase, often marketed as a secure, regulated gateway for cryptocurrency trading, has repeatedly faced criticism for its approach to security and customer service.
While the company has enjoyed significant growth, particularly after its public listing in 2021, the platform’s troubles with account access and data breaches have tarnished its image, especially among experienced crypto users.
In 2021, Coinbase faced similar criticism when thousands of customers reported being locked out of their accounts, sometimes for extended periods, without any clear resolution.
The situation left many unable to access their funds during times of high market volatility, leading to significant financial losses.
The New York Times highlighted how the exchange struggled to provide timely customer support, further intensifying user dissatisfaction.
Security Breaches and Slow Response Fuel Growing Concerns
Coinbase's reputation for security also took a hit in 2021 after a vulnerability in its SMS-based account recovery system allowed hackers to bypass two-factor authentication.
The breach resulted in several user wallets being drained, leading to even more discontent within the community.
While Coinbase reimbursed some victims, critics were quick to point out that the company had been slow to respond to the situation and failed to fully address the security flaw.
These ongoing issues have made many crypto users wary of trusting Coinbase with their funds.
In the face of such incidents, the company’s claims of being a “secure” and “transparent” platform ring hollow for many long-term users who expect more from a leading exchange.
Rising Regulatory Pressure Adds to Coinbase’s Challenges
As Coinbase battles growing regulatory scrutiny, particularly from the U.S. Securities and Exchange Commission (SEC), questions about its commitment to compliance have become more pronounced.
In 2023, the SEC sued Coinbase for operating as an unregistered securities exchange, adding another layer of complexity to the company’s ongoing challenges.
While Coinbase has maintained its position as a proponent of regulatory clarity, defending the need for new frameworks in the crypto industry, users like ZachXBT are left wondering whether the company has shown the same level of diligence when it comes to protecting their personal information and funds.
ZachXBT’s Criticism Mirrors Growing Distrust in Centralised Platforms
ZachXBT’s remarks tap into a broader sense of frustration within the crypto community, where many users are increasingly turning to decentralised platforms in search of better control, transparency, and security.
The frequent critiques of centralised exchanges like Coinbase reflect a growing demand for greater accountability and openness in the industry, especially when it comes to handling user data and responding to security breaches.
As a well-regarded figure known for tracking fraud and assisting victims, ZachXBT’s outspoken criticisms emphasise the importance of transparency in the crypto space.
ZachXBT Warns Against Token2049 Sponsors Over Credibility Issues
Recently, ZachXBT has also raised concerns about the credibility of Token2049’s sponsors, urging caution ahead of the event.
He criticised the organisers for insufficient due diligence, warning that sponsorship does not guarantee trustworthiness.
Zach pointed to Spacecoin, a title sponsor, describing it as a “botted project,” and highlighted other suspicious entities like Bitunix, JuCoin, and DWF, which have faced regulatory and operational issues.
He cautioned that such sponsorships often mask deeper concerns, referencing past incidents like the JPEX scandal.
As Token2049 approaches, ZachXBT's warning urges attendees to carefully examine event sponsors.
Miyuki
Brian
Weiliang