Coinbase users have taken to social media to complain about the crypto exchange’s restriction on their accounts without any explanation. The restrictions are coming at a period when the market is in high spirits, and tokens are posting remarkable gains. Most traders were barred from making transactions, with most complaining about the no-show from Coinbase in terms of explanations.
Over the last few days, crypto influencers have been hit the most, with most verified and long-term users suffering the same fate. The restrictions have made most users abandon the platform, moving to rival platforms like Kraken, Binance, and Bybit for their daily crypto activities. Some of the restrictions also include the user not being able to make transfers.
Coinbase users complain amid losses incurred via restrictions
Over the last few years, some Coinbase users have suffered this same fate, with most restrictions taking weeks to resolve. In some cases where the process takes months before it is resolved, it often leads to users incurring losses due to their inability to carry out activities. The platform has its dedicated KYC screening feature, which is limited by jurisdiction.
However, most of the present crop of users have already undergone KYC screening and have been using their accounts for a while before the restrictions. Also, the exchange’s restriction rules can increase trading limits or ban users’ access. The exchange may also have other internal rules that it has yet to share with its users. According to its Terms of Service, Coinbase does not need to give a reason for restrictions, but the exchange is required to notify users two months before enforcing them.
The platform frowns on VPN usage
According to several sources, user accounts may be flagged for using VPN. VPN, which was originally used to hide the source of funds or the location of the user, has been frowned upon by the exchange. The company’s product director Scott Shapiro even mentioned that VPNs may be seen as an attack, leading to an account being flagged. The exchange’s algorithm sees VPN usage alerts and flags the accounts due to suspicion of fraud or money laundering.
However, the recent flagging has touched even users without VPNs. Most of the accounts were flagged when activities in the market were at their peak, leading to them missing out on potential profits. Coinbase’s reliability score is still very high, regardless of the recent trend of its restrictions on social media. While the exchange is allowed to restrict accounts at will, doing this to long-term traders during peak market activity is making it difficult for them.