Michael Pierre was sitting in his Brooklyn, New York, apartment last summer when he received a text on his iPhone from an unknown number, then immediately lost service. Worried his phone was being hacked, he quickly checked his most valued app: Coinbase, a cryptocurrency company where he had stored digital coins worth $100,000.
Pierre could not log in. Panicked, he emailed Coinbase for help. The company later told him that an “attacker” had reset his password and drained his account. Pierre said he was shocked because he had expected Coinbase’s security to detect suspicious activity and stop the theft.
“I was thinking about retirement, family, having money for those rainy days,” he said. “And within a couple of minutes, it was all taken away from me.”
Pierre, 47, a lawyer and onetime Coinbase employee, began urging his former colleagues to investigate the episode and to compensate him for the missing cryptocurrencies, which would be worth more than $400,000 today. He received little assistance, he said. So in January, he sued Coinbase, accusing the company of negligent security measures and failing to protect his money.
His cautionary tale is one of dozens from Coinbase customers around the world who say that their accounts were plundered by attackers or that they were locked out of their life savings without warning or reason — and that the company failed to detect the issues and did little to help. As Coinbase prepares to go public in the next few weeks, cementing its status as one of the world’s biggest cryptocurrency enterprises, its users’ experiences show how the company sometimes still struggles to address basic customer service complaints.