Prominent Ethereum developer Eric Connor faced an unexpected account lockout from cryptocurrency exchange Coinbase while attempting to transfer $25,000 in USDC stablecoin on December 3rd.
Connor reported that his account access was completely blocked after initiating the transfer while using a VPN service, with no prior warnings about potential VPN-related restrictions. The lockout prevented both the transfer completion and any account access attempts.
The developer expressed frustration with Coinbase's customer service response, noting that the suggested account recovery options were inaccessible due to the lockout itself. His phone interaction with a service representative also failed to resolve the situation.
While some community members defended Coinbase's actions as security measures against potential unauthorized access, Connor argued that better implementation methods exist than complete account restriction. The incident sparked widespread discussion, with numerous users sharing similar experiences of extended account lockouts on centralized exchanges.
Coinbase publicly acknowledged the issue on social media, promising to investigate and resolve Connor's case. Within hours, the developer confirmed his account access was restored but emphasized the need for improved account security processes, noting that his public profile likely expedited the resolution.
The incident highlighted broader concerns about centralized cryptocurrency exchanges adopting traditional banking practices, including sudden account restrictions, transaction limits, and increased personal information requirements. Some users reported recent reductions in their daily transaction limits, with speculation arising about potential exchange liquidity management strategies.
Blockchain attorney Joshua Carlson defended the exchange's cautious approach, suggesting that such security measures, while inconvenient, serve to protect users' assets from unauthorized access attempts.