Sunday, November 27, 2022

Coinbase Faces Class Action Suit Over Unclaimed Bitcoins Sent via Email

Coinbase Faces Class Action Suit Over Unclaimed Bitcoins Sent via Email

Coinbase is unlawfully holding onto cryptocurrency amounts sent via its email feature but never claimed, according to a new class action lawsuit. The suit also seeks to recover valuable tokens that resulted from “forks” or “airdrops” from the unclaimed balances.

Also see: 16 Japanese Exchanges Form Group to Self-Regulate Digital Asset Industry

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Email Feature Also Expanded Coinbase User Base

Coinbase has a feature for account holders to send bitcoin and other supported cryptocurrencies via email — recipients get a link to Coinbase to claim the amount. If the recipient doesn’t have an account with Coinbase, they’re invited to create one. As well as a convenience for existing users, it’s a viral technique for Coinbase to expand its user base.

email iconThe civil complaint, lodged in California’s Northern District by plaintiffs Timothy G. Faasse and Jeffrey Hansen, states that “until 2017, most people had never heard of a ‘bitcoin’ or cryptocurrency, so most of these emails were disregarded. And most of the cryptocurrency went unclaimed”.

They claim Coinbase violated California’s “Unclaimed Property” and “Unlawful and Unfair Business Practices” laws and have requested a jury trial.

So far, Coinbase hasn’t made any public statement in response to the suit. Bitsonline has reached out to the company for comment.

Potentially Thousands of Affected Email Recipients

The two plaintiffs believe there are potentially thousands of others with similar claims, whom they seek to add to the Class by making the action public.

Some responded to Vays’ tweet saying Coinbase had always returned unclaimed BTC to them after a short time (30 days). The class action suit claims, however, that Coinbase simply kept the amounts. It also suggests some of the unclaimed amounts were due to senders’ email addresses went “stale” (i.e.: fell into disuse).

Destiny of Unclaimed Email Funds Unknown

Plaintiffs Faasse and Hansen both claim they were sent single emailed notifications from Coinbase in late 2013, advising them to claim a sent BTC amount. After both were reminded by the senders (not Coinbase), they clicked the links only to find they were no longer valid.

Coinbase logoFaasse and Hansen received 0.1 BTC and 0.01 BTC respectively. At today’s prices, they’re worth $1,100 and $110 USD. Since the amounts were sent before 2017 there are potentially other balances of value from Bitcoin’s numerous hard forks (most notably Bitcoin Cash and Bitcoin Gold). Unclaimed Ethereum ETH amounts could also have related “airdropped” ERC20 tokens handed out as free promotions by new projects.

The class action does not cover cryptocurrency amounts emailed from one Coinbase user to another, since Coinbase automatically debited and credited each account.

In recent times, scammers have also employed an “emailed bitcoin balance” email technique to trick random recipients into clicking on links and visiting malicious websites. Coinbase itself has warned of such scams, which can come via email or social media messages.

Do you have any experience using Coinbase’s email feature? What was the experience like? Let us know in the comments.

Images via Coinbase, Crypto Merch Club

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