Coinbase has been sued by a surgeon in Indiana who claims hackers were able to steal almost $350,000 in cryptocurrencies thanks to inadequate safety measures implemented by the crypto exchange. More concerning, Coinbase allegedly accepted payments from the hackers to settle the surgeon’s outstanding loans.
Doctor Ricardo Vasquez, a vascular surgeon operating in Bloomington, Indiana, filed the lawsuit in San Francisco Superior Court last week. Coinbase is being sued for breach of contract, breach of the covenent of good faith and fair dealing, negligence, bailment, and unfair competition.
“Despite repeated promises of advanced security technologies and ‘bank-level’ controls, Coinbase allowed hackers to evade all security measures and empty the account of Ricardo Vasquez without raising any red flags or alerts,” the lawsuit claims. The surgeon alleged that password reset delays, device verification, and two-factor authentication weren’t enough to prevent the hackers, nor did Coinbase alert him in time.
According to the San Francisco Standard, the hackers converted his holdings into ether and made 217 transfers.
During the time of the hack, Vasquez had an outstanding loan to Coinbase for $40,000. Instead of serving as a deterrent, the hackers were willing to pay off his debts in order to drain the account. According to Vasquez, this points to Coinbase securing its own interests before the welfare of its clients.
“Coinbase engaged with, required, and accepted payments from the hackers before allowing them to transfer assets out of the account,” the complaint stated. “In short, Coinbase implemented controls to protect itself while ignoring risks to its own customers.”
The surgeon claimed that Coinbase customer service was unhelpful. Apart from failing to raise red flags, it was nearly impossible to reach the company — when he did, he was met with automated voice messages and employees hanging up on him. Vasquez claimed that it took weeks to get an understanding of what occurred from someone working at Coinbase.
The crypto exchange, based in Delaware and headquartered in San Francisco, has been asked to compensate Vasquez for $348,407 — the amount the surgeon has lost to the Coinbase hackers — as well as fees to cover interest and legal costs.