COINBASE HIT WITH SECOND CLASS ACTION LAWSUIT FOR VIOLATING ‘UNCLAIMED PROPERTY’ LAWS
Smart PlanetA class action lawsuit has been filed against popular California-based cryptocurrency exchange Coinbase on March 2. The lawsuit accuses Coinbase of both violating California’s Unclaimed Property Law and conducting unlawful and unfair business practices.
LOST & UNFOUND
The allegations against Coinbase stem from the exchange allowing its users to send Bitcoin, Ethereum, Litecoin, and Bitcoin Cash to external email addresses — as opposed to cryptocurrency wallets. The emails would come with a link allowing the recipient to create a Coinbase account and claim their cryptocurrency. However, not every transaction was redeemed, and questions have been asked regarding what has happened to those unredeemed funds.
As explained in the filing:
Imagine writing a cashier’s check to a friend. The bank withdraws funds from your account, but your friend never cashes the check. Does the bank get to keep the funds? The law clearly says no. But this is exactly what has happened with Cryptocurrencies sent through Coinbase.com…
The Plaintiffs allege that Coinbase has opted to keep the unclaimed cryptocurrencies, as opposed to notifying the senders that the funds were never claimed – which purportedly violates the State of California’s Unclaimed Property Law.
Explains the filing:
Accordingly, this class action seeks to recover these unclaimed Cryptocurrencies and deliver them to the intended recipients, as well as all “forks” thereof (e.g. Bitcoin Cash fork of Bitcoin), and “airdrops” related thereto (e.g., ERC20 […] airdrops of Ethereum related tokens).
Funds which cannot be delivered to recipients due to stale email addresses are asked to be turned over to the State of California in order “to prevent unjust enrichment of [Coinbase].”
MORE MONEY, MORE PROBLEMS
Coinbase has had a whole slew of issues lately.
In addition to a class action lawsuit regarding violations of California’s Unclaimed Property Law, a class action lawsuit has been filed against the exchange for alleged insider trading.
The exchange also recently was forced to deal with the gross duplication of users’ past orders, effectively draining users’ bank accounts without permission. However, VISA ultimately accepted responsibility for the erroneous fault – though the damage has undoubtedly been done to Coinbase’s reputation as a secure exchange to invest in cryptocurrencies.