Coinbase says it’s reduced account lockouts by 82%
This is a segment from The Drop newsletter. To read full editions, subscribe.
Coinbase is taking action to reduce the number of users it’s locking out — and says its efforts are paying off.
“Account freezing has been a major issue at Coinbase for longer than is acceptable,” Coinbase CEO Brian Armstrong said. “I could list a bunch of the underlying reasons why it got so bad in the first place, but what’s more important is that we’ve made it a priority to fix, and we have been making good progress.”
Dor Levi, Coinbase VP of Product, explained that he joined Coinbase recently with the goal of getting account-lock numbers down.
“Our restriction experience is not meeting my own bar,” Levi said.
Coinbase recently made some technical changes and improvements, including some to its infrastructure, teams, and machine learning models. They’ve been able to fine-tune said ML models to tackle the issue.
“Account freezes should be rare, limited to situations that warrant them, primarily when we’re legally obligated (e.g. sanctions or court orders) or protecting users (e.g. from scams or account compromises),” Levi wrote.
Both Armstrong and Levi confirmed that account-lock occurrences are down roughly 82% within the past few months.
Coinbase often restricts user accounts when it’s concerned about what it detects as potentially suspicious activity. This means any activity that could be in possible violation of any nation’s laws, including fraud. Locked accounts can result in customers being forced to jump through various ID verification hoops and spend time speaking with support to try to resolve the issue.
Coinbase’s site says it “sometimes” places restrictions on user accounts, but claims that only very rarely does it fully “freeze” customer funds.
This change within Coinbase is a step toward keeping more of its users happy, especially as it faces scrutiny following a customer support-related data breach.
We’re still waiting to see how or whether Coinbase ups its customer data security practices post-breach.
Get the news in your inbox. Explore Blockworks newsletters: