As a seasoned crypto investor with years of experience navigating the volatile digital asset landscape, I find myself increasingly frustrated with the growing similarities between centralized exchanges and traditional banks. The latest incident involving Ethereum developer Eric Connor’s account lockout by Coinbase after trying to send $25,000 USDC, is yet another example of these platforms exhibiting questionable practices.
Ethereum developer Eric Connor announced on December 3rd that his Coinbase account was secured following an attempt to transfer $25,000 worth of USDC.
“Wasn’t Brian Armstrong just talking about debanking? Very cool!” he quipped.
He added that the notification was “completely useless” as both paths to unlock the account required him to sign in, which he couldn’t do.
“Service agent on the phone also completely useless,” he added.
Coinbase just locked my account after trying to send $25k USDC
Wasn’t @brian_armstrong just talking about debanking???
Very cool!
— eric.eth (@econoar) December 2, 2024
Nuked Account a Lazy Solution
It was noted by others that instead of ‘debanking’ him, they were securing his account from potential hacks and unauthorized transfers to preserve the $25,000 USDC. He expressed that this action seemed like a “hasty or careless approach” before continuing with:
“There are plenty of better ways to handle this than just nuking my account.”
Afterward, Connor disclosed that his account had been blocked due to the fact he was utilizing a VPN (a secure, private network) during the data transfer. No alerts were given about such an occurrence might take place.
Many individuals, similar to those who had experienced the same predicament of being shut out from centralized exchange platforms without prior notice, voiced their agreement. Some of these users were locked out for extended periods, often lasting months. Notably, blockchain attorney Joshua Carlson commented that, in general, the system is functioning as intended.
He suggested using passkeys for security, and he’d understand if Coinbase temporarily locked his account due to potential hacking attempts, as he viewed this as an overall advantage.
Coinbase replied to the post saying, “Apologies for the inconvenience caused due to your account being locked after transferring USDC assets. We’re investigating this matter now and will get in touch with you soon. Meanwhile, feel free to direct message us so we can keep you updated directly.
After a few hours following the lockdown, Connor announced the issue was solved. However, he found the comments on X regarding his post particularly astonishing.
I’m crossing my fingers that Coinbase is developing a more user-friendly approach for securing and retrieving accounts, as it can be challenging for some users. Unfortunately, not everyone is as fortunate as me…
Limits Decreased Without Warning
Other replies indicated dissatisfaction from clients due to a sudden decrease in their daily limits, without any apparent cause.
Fellow Ethereum developer ‘Zak’ opined that this may be an effort to reduce selling pressure.
Here’s a possible way to rephrase your statement in simpler, more conversational language: “I believe the platform is planning to lower withdrawal limits for users who have withdrawn a significant amount in the last year. The idea seems to be to control sell-side pressure and maintain liquidity in their books.
Decentralized platforms are gradually transforming into institutions akin to banks, displaying comparable practices like unexplained account freezes, inadequate client service, restrictions on financial transactions, and requests for escalating personal data.
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2024-12-03 23:33