Coinbase Cuts Account Restrictions by 82% Amid Data Breach Scrutiny

Coinbase has made significant strides in reducing unnecessary account restrictions, slashing them by 82%. This improvement comes after years of user frustration and criticism over long-standing issues that left many users locked out of their accounts for extended periods. CEO Brian Armstrong acknowledged the problem in a recent post, calling it a "major issue" that had persisted for too long. He emphasized that resolving it has become a top priority for the company.

Armstrong credited the progress to Dor Levi, a recent hire on the Coinbase product team. Levi, who joined nine weeks ago, highlighted the company's investment in upgrading its machine learning models and internal infrastructure. These enhancements have improved the accuracy of automated systems that flag accounts for potential violations, thereby reducing false positives and unnecessary restrictions.

Despite these improvements, some users continue to report being locked out of their accounts. One user claimed to have been denied access for over two years, while another left the exchange after an eight-month freeze. These incidents underscore the ongoing challenges in customer service and support, which have been a long-running complaint among users.

The timing of these updates coincides with increased scrutiny over Coinbase's handling of a data breach disclosed in May. The breach exposed personal details of over 70,000 customers, further eroding user confidence. The company's efforts to address these issues are being closely watched by both retail traders and regulatory bodies evaluating the security and reliability of crypto infrastructure.

For Coinbase to win back trader trust, consistent action and transparent communication will be crucial. The company's efforts to resolve user pain points are a meaningful start, but many retail users who left after prolonged freezes will need to see sustained improvements to believe the change is real. As the largest custodian of spot Bitcoin ETFs and a major exchange with over 100 million users, Coinbase has much at stake in regaining user confidence and trust.

Ask Aime: Will Coinbase's account restriction improvements enhance trading freedom for retail investors?