“Coinbase just locked my account after trying to send $25,000 USDC,” Ethereum developer Eric Connor reported on December 3.
“Wasn’t Brian Armstrong just talking about debanking? Very cool!” he joked.
He added that the notification was “completely useless” as both ways of unlocking the account required him to log in, which he was unable to do.
“The service agent on the phone is also completely useless,” he added.
Coinbase just blocked my account after trying to send $25k USDC
it was not @brian_armstrong Are we only talking about unbanking?
Very cool! pic.twitter.com/3s7waNxsWn
– eric.eth (@econoar) December 2, 2024
The nuclear account is a lazy solution
Others noted that they were not “unbanking” it, but rather protecting it against account hacks and unauthorized transfers to safeguard the $25,000 USDC. It seems like a “lazy implementation if that’s the case,” he said before adding:
“There are many better ways to handle this than just bombing my account.”
Connor then revealed that the account was locked because he was using a VPN (virtual private network) when making the transfer and there were no warnings that this could happen.
There were many responses of agreement from those who had also been blocked from accessing centralized exchange accounts without warning, some of them for months. Blockchain lawyer Joshua Carlson saying that, overall, the system is working as designed.
“I would recommend setting up a passcode and I wouldn’t be mad at Coinbase if they suspected someone was trying to hack my account and blocked it. “I will consider it a net benefit,” he added.
Coinbase responded to the post and said, “We are sorry to hear that your account was blocked after sending your assets in USDC. We are currently investigating this and will contact you shortly. In the meantime, send us a DM so we can give you updates directly.”
A few hours after the lockout, Connor reported that the incident had been resolved, but added that the responses to his post on X were “mind-blowing.”
“Hopefully Coinbase is working on a much better process to not block AND recover accounts so easily. I’m lucky with my reach. Others, not so much…”
Reduced limits without prior notice
Other responses were from customers complaining that their daily limits had recently decreased for no reason.
Fellow Ethereum Developer ‘Zak’ opined That this may be an effort to reduce sales pressure.
“My theory is that they are lowering the limits for people who have withdrawn more than a certain amount in the last year or so to reduce selling pressure and maintain liquidity on their books.”
Centralized exchanges are slowly transforming into banks that exhibit similar behaviors, such as arbitrary account blocking, lack of customer support, limits on transactions, and demands for an increasing amount of personal information.
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