Coinbase faces user backlash over account restrictions amid fraud spike (2025)

Coinbase has addressed recent concerns about account restrictions, attributing the issue to a spike in fraudulent activities following the US presidential election.

In a Dec. 8 post on social media platform X (formerly Twitter), the exchange dismissed claims of widespread account limitations as misinformation and FUD.

The firm pointed out that it experienced a growth in user activity, which brought a threefold increase in fraudulent attempts, —a pattern commonly seen during periods of heightened activity. The exchange emphasized that its fraud prevention systems successfully prevented millions in potential customer losses throughout November.

Yet, these measures have led to more restricted accounts and longer wait times for support resolutions. It explained:

“This is causing a minor increase in restricted accounts and elevated CX wait times. Please bear with us and don’t believe everything you see on Twitter.”

Community rejects Coinbase explanation

Despite Coinbase’s reassurances, its approach has drawn criticism from users and industry voices.

Austin Federa, a former Solana Foundation executive, challenged the platform’s claims, stating that the issue goes beyond misinformation. He highlighted personal experiences, including his mother’s account being restricted without clear justification despite meeting all compliance requirements.

Federa also expressed frustration over the lack of clarity from Coinbase support, which reportedly extended the restriction period without explanation. He stated:

“I know a few folks at Coinbase – I ping them asking to help, they intervene… she tries to transfer assets out and boom, flagged again, this time for twice as long.”

Other users echoed similar grievances, sharing stories of restricted accounts despite adhering to the platform’s policies. A community note attached to Coinbase’s post also supported claims that the restrictions are real, adding weight to the criticisms.

This backlash follows another recent controversyin which Coinbase was criticized for restricting the accounts of users who accessed the platform via Virtual Private Networks (VPNs).

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