Coinbase cancels user accounts and confiscates their assets, sparking controversy

24-07-26 18:34

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Original title: "Coinbase "doesn't want Chinese" users? The community is full of disasters: accounts deleted, assets transferred away, and the community scolded it as robbery"

Original author: Ting, BlockTempo

Shenyu, co-founder and CEO of Cobo, a digital asset custody solution provider, posted an article on the social platform yesterday, with the title "The biggest enemy of hoarding coins is __?", and attached a case shared by a netizen on the social platform Xiaohongshu, whose assets were occupied by the centralized exchange Coinbase.

Netizens scolded Coinbase for openly robbing users' assets

On the social platform Xiaohongshu, a Chinese netizen with the pseudonym "Chu" published an article titled "Openly robbed Coinbase, a full record of Bitcoin investment rights protection" on the 24th.

The article mentioned that the netizen went all in on the cryptocurrency world in 2017 and made frequent transactions in the past few years. In 2021, he decided to start hoarding coins, but because he was worried that Huobi and Binance would be frequently hacked and disconnected from the Internet, he transferred all his tokens to Coinbase, a legal trading platform in the United States, at the end of the year. After that, he would occasionally log in to his account to check the status of his assets.

However, in June this year, the netizen found that he could not log in to his Coinbase account. After consulting customer service, he found that the account had been cancelled and the BTC in the account had been sold and sent to an institution in Wyoming, USA. The reason given by Coinbase was that the netizen's account had not been active for a long time and the assets were regarded as "Unclaim Property".

Assets are considered "Unclaimed Property"

According to the relevant explanation on the Coinbase official website, depending on the laws of each state, accounts that have not been active for 3 to 5 years will be classified as Unclaimed Property. However, the netizen logged in in February and March this year, so he thought the reason given by Coinbase customer service was pure nonsense. After the netizen continued to ask and provided proof of login, Coinbase customer service said that they could not help and could only ask the netizen to go to the Wyoming Unclaimed Property Department (Wyoming’s Division) to get the assets back.

Since the incident, the netizen has been paying attention to the website of Wyoming’s Unclaimed Property Division and found that it was not just his case. There were many similar cases, so it took the department 3 months just to sort out these assets. The netizen also found his asset records after searching for many days, so he quickly found various information to try to apply for recovery. However, since he has forgotten most of the personal information used to register his account, he believes the chances of recovering his assets are slim.

Netizens' asset transfer records

What is Unclaimed Property?

According to the Coinbase official website, when the account owner has no contact or activity for a period of time specified by state law (usually 3-5 years), your funds will be confiscated, and they are considered unclaimed or abandoned property.

The form of unclaimed property includes but is not limited to checking/savings accounts, brokerage accounts, 401k accounts, retirement fund accounts, and items in safe deposit boxes.

Reddit community frequently reports the same problem

On the other hand, many netizens have complained about the same problem on the community forum Reddit, describing that their accounts were closed and their assets were transferred to the Wyoming Unclaimed Property Department.

In many cases, it can be found that Coinbase closed accounts mostly because "The user created an account at Coinbase Kenya Ascending Markets, Ltd., which is now closed", and Coinbase said that it tried to contact the user through the email address verified by the user many times to inform the account closure, but did not receive a reply from the user.

According to the picture provided by Xiaohongshu netizen "Chu", Coinbase customer service replied that his account was closed because he created an account at Coinbase Kenya Ascending Markets, Ltd.

However, many Reddit users also criticized: "Coinbase APP did not notify you at all", "The email description was unclear and did not clearly state that the account would be closed"...