Coinbase says fraud controls can lock users out indefinitely as ex-Solana exec gets hit

Austin Federa, co-founder of crypto infrastructure network DoubleZero and a former head of strategy at the Solana Foundation, said in a Wednesday post on X that Coinbase restricted his account shortly after what he described as a routine transfer over Base, the exchange's Ethereum Layer-2 network.

Federa shared screenshots showing trading and transfers disabled while the account underwent a security review.

• The restriction arrived at 10:08 am and initially told him the review could take around 24 hours, according to the screenshots.
• His access was ultimately restored, making the episode relatively short-lived.

But Coinbase itself acknowledges that similar fraud controls don't always end so quickly.

When fraud controls lock out the customer

In its latest annual report, Coinbase said some fraud detection measures had led to "poor customer experiences," including "indefinite account inaccessibility" for some customers, increasing support costs and potentially compounding damages.

The exchange says it may automatically lock an account after detecting suspicious activity. When that happens, customers can still view their balances and transaction history, but trading and crypto transfers are disabled until the account is unlocked.

And while some restrictions disappear automatically, Coinbase says reviews typically take up to 10 business days, with individual cases potentially taking longer.

• The company lists suspected malicious activity, security concerns and problems during account recovery among reasons an account can be restricted.