Coinbase responds to account restriction 'FUD': 'We're not ignoring you'

Amid reports on X over the weekend from Coinbase customers that their accounts were suddenly restricted by the platform, Coinbase's @CoinbaseSupport X account has responded in a series of posts, asking customers, "Please bear with us and don’t believe everything you see on twitter."

Reports of attacks targeting Coinbase users have ticked up in recent weeks. Several accounts were targeted on Saturday night, according to pseudonymous security researcher and SEAL 911 team member @pcaversaccio, who posted on X , "Yesterday skiddies (again) decided to fake Coinbase support and drained multiple accounts."  

("Skiddies" refers to "script kiddies," or unsophisticated and often young hackers who use premade programs or "scripts" in their exploits rather than designing their own.) 

"We’ve seen a surge of new users and old users re-activating their accounts post-election," the @CoinbaseSupport X account wrote in its thread. "Along with this surge, as is typical with surges, we’ve seen a 2-3x increase in fraudulent attempts...our fraud-prevention systems are acting as expected and have saved customers tens of millions in losses in November alone."

Coinbase's apparent stance on users' use of VPNs was recently criticized by researchers. According to a Dec. 2 X post from Coinbase product director Scott Shapiro, since "attackers always use VPN's," (emphasis in original), the exchange's risk models "take that as a negative sign even if you're legitimately using your own account."

In a follow-up thread , Shapiro clarified the use of a VPN alone wouldn't cause a Coinbase account to be flagged. "These tools [VPNs or an ad-blocker] in combination with other factors - such as a login from an unknown device from a new country trying to send a large amount of crypto to a new address - can trigger a false positive requiring an additional security review." 

"A VPN is your digital armour. People might use a public Wi-Fi or want to prevent government/ISP tracking when logging into Coinbase," @pcaversaccio wrote in response to Shapiro's original post. "You are making some of your users choose between financial freedom and physical safety," wrote Nick Percoco, the chief security officer of rival exchange Kraken. (Coinbase and Shapiro did not immediately respond to a request for further comment from The Block.)

Others have criticized Coinbase's lack of timely support during the weekend. "I'm glad to know that Coinbase puts such a high priority on work-life balance," said Metamask principal security researcher Taylor Monahan in a statement to The Block. "Because, as we all know, crypto operates 9-5 PT Monday-Friday and no one victimizes your users outside those hours either." 

The @CoinbaseSupport account said in its thread the surge in fraudulent attempts has led to "a minor increase in restricted accounts and elevated CX wait times," asking users to "please bear with us and don’t believe everything you see on twitter." 

"That said, if you are restricted, we’re not ignoring you; we’re working hard to respond asap," the thread concludes.