Brian Armstrong, CEO of Coinbase, stated in an X put up on Friday that the platform has lowered the problem of pointless account freezes and restrictions by 82% to this point. Noting that pointless account freezing has been a “main situation” for Coinbase customers “for longer than is suitable,” he wrote:
“I may record a bunch of the underlying the explanation why it [account restrictions] received so dangerous within the first place, however what’s extra essential is that we’ve made it a precedence to repair, and we have now been making good progress.”
Armstrong added that the trade will proceed to make enhancements, asserting them as they’re rolled out.
Steps taken by Coinbase to cut back account freezes
Armstrong’s claims got here as a response to a put up by Dor Levi, founding father of smIXL, a real-time blockchain knowledge simulation and evaluation agency acquired by Dune Analytics final yr. Levi, who’s now a part of the workforce working to repair Coinbase’s situation of account restrictions, detailed the steps taken by the trade to handle the problem.
Levi acknowledged that he joined Coinbase with the only objective of serving to repair the platform’s situation with account restrictions. He famous that the objective is to make sure that account freezes are “uncommon.” Restrictions on accounts needs to be restricted to circumstances that necessitate them, equivalent to authorized obligations to stick to sanctions or courtroom orders, or to guard prospects from scams and account compromises, he added.
Levi wrote:
“We’re dedicated to getting this proper. Latest releases have enabled us to make enormous enhancements with out sacrificing our authorized and regulatory obligations, or our dedication to security.”
He additionally listed sure measures that Coinbase has adopted to cut back account restrictions. This consists of “important investments” in machine studying (ML) fashions, infrastructure, modeling, and groups. These investments have helped enhance the “precision and recall” of Coinbase’s fashions, leading to fewer restrictions and freezes, Levi stated.
The trade can also be shifting processes like source-of-funds verification and enhanced know-your-customer (KYC) validation into the Coinbase app to hurry up the method of eradicating restrictions. Levi wrote:
“This [moving processes into the app] means most restriction varieties could have self-service flows to take away restrictions, which is rather more environment friendly than earlier choices.”
He added that the trade has additionally established guardrails to make sure that lowering account freezes stays a main focus.
Coinbase customers have lengthy complained about account freezes
For years, Coinbase was the second-largest crypto trade by buying and selling quantity, second solely to Binance, till Bybit bumped it in March 2024. Regardless of the appreciable buying and selling quantity it handles every day, Coinbase customers have lengthy complained about inexplicable or pointless account freezes for extended durations.
In December 2024, EthHub co-founder Eric Conner took to X to complain that his Coinbase account was locked whereas attempting to execute a transaction. Connor famous that the freeze was purportedly carried out as a result of he used a digital personal community (VPN) to entry his account.
Following Connor’s put up, a barrage of comparable complaints flowed in, sparking a social media backlash. Some customers reported being locked out of their accounts for months and even years.
Coinbase product director Scott Shapiro defined on the time that the trade’s threat fashions mechanically flag entry by way of VPNs, that are at all times utilized by miscreants. Whereas some, like Blockworks co-founder Jason Yanowitz, supported Coinbase’s effort to guard customers, Connor known as it a “lazy implementation.”
The issue of frozen accounts persists, regardless of Coinbase’s efforts to repair it. In truth, a consumer replied to Levi’s put up on Friday, stating that his account has been frozen for per week, after he tried to ship $10 value of crypto to a brand new account. The consumer, who famous that he has been a Coinbase buyer for 10 years, stated that the account restrictions had been utilized to all his belongings, not simply those he tried to make use of.
