ZachXBT slams Coinbase over account locks, data leak, and lack of transparency

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Crypto investigator and on-chain sleuth ZachXBT has ripped Coinbase over repeated account locks and an undisclosed data breach.

In a scathing critique that has renewed allegations about one of the world’s biggest cryptocurrency exchanges, ZachXBT says Coinbase’s culture is defined by a “lack of transparency.”

On social media, ZachXBT expressed frustration: “You have locked me out of my account twice in the last month with no reason given (again today). You had customer data leaks you haven’t transparently announced (lead to thefts).”

While he acknowledged that the platform offers a decent annual percentage return on stablecoins, he ultimately stated that he could not recommend Coinbase as an exchange to others.

ZachXBT ignites fresh backlash over Coinbase’s troubled history with user trust and security

ZachXBT comments have sparked controversy about Coinbase’s customer data handling, practices, and support.

While the company largely promotes itself as the “future of money” and a paragon of regulatory compliance in the crypto space, incidents of this nature do little to enhance its reputation — especially among more experienced users.

Coinbase portrays itself as a secure, transparent, and regulated entry point to crypto —a message that is easy to sell to institutional investors and new entrants.

Its initial public offering in 2021 was a watershed moment for the crypto industry. But the company’s history tells a more complex tale for long-time users and crypto veterans.

That same year, Coinbase was criticized after thousands of users reported being locked out of their accounts, some for months, without any resolution.

The New York Times explained how so many of these customers could not connect with support when they were most vulnerable, with catastrophic loss as the prices swung violently.

A similar bug in Coinbase’s SMS account recovery process later that same year allowed hackers to bypass two-factor authentication to drain user wallets.

Coinbase ultimately reimbursed some victims, but critics pointed out that the company was slow to communicate and did not take the breach seriously enough.

Coinbase faces increasing regulatory pressure while users express growing discontent

Coinbase is not new to controversy. In 2023, the U.S. Securities and Exchange Commission (SEC) sued the company for operating an unregistered securities exchange.

Whereas Coinbase is battling the suit, positioning itself as a pioneer of regulatory compliance, users like ZachXBT wonder whether the company has also displayed the same diligence in protecting and communicating with its customers.

Coinbase has pushed back legally — demanding the creation of new regulatory frameworks for the industry — but the lawsuit has increased pressure on the company to demonstrate its commitment to compliance, not only with regulators but with users.

ZachXBT’s remarks also reflect a widespread mistrust of the status quo in the crypto world, many of whom gravitate toward decentralized platforms in search of greater control, transparency, and reliability.

Condemnation like ZachXBT’s carries particular weight in the crypto world. Famed for carefully tracking a range of fraudulent schemes and aiding users in retrieving lost funds, he is a widely regarded guardian of crypto ethics — one whose critiques spur wider action or awareness.

Original Article