Hoarding coins turns into "zombie fans," Coinbase cancels user accounts and confiscates their assets, sparking controversy

Author: Ting, BlockTempo

Cobo co-founder and CEO Shen Yu, yesterday posted on social media with the title "What is the biggest enemy of holding coins __?" and attached a case shared by a netizen on the social platform Xiaohongshu, where their assets were seized by the centralized exchange Coinbase.

Netizen angrily criticizes Coinbase for outright theft of user assets

A Chinese netizen using the alias "Chu" published an article titled "Coinbase's blatant theft, a complete record of Bitcoin investment rights protection" on Xiaohongshu on the 24th.

The article mentions that this netizen went all in on the crypto space in 2017 and frequently traded over the years. In 2021, he decided to start holding coins, but due to concerns about frequent hacking attacks and outages on Huobi and Binance, he transferred all his tokens to the legally operating platform Coinbase in the U.S. by the end of that year, and he would occasionally log into his account to check his asset status.

However, in June of this year, the netizen found that he could not log into his Coinbase account. After consulting customer service, he discovered that his account had been canceled, and the BTC in his account had been sold and sent to an institution in Wyoming, USA. Coinbase's reason was that the netizen's account had been inactive for a long time, and the assets were considered "Unclaimed Property."

Assets considered "Unclaimed Property"

According to the explanation on the Coinbase website, depending on state laws, accounts that have been inactive for 3 to 5 years will be classified as Unclaimed Property. However, the netizen had logged in during February and March of this year, so he believed that the reason given by Coinbase customer service was purely nonsense. After the netizen continued to inquire and provided proof of login, Coinbase customer service stated that they were also powerless and could only ask the netizen to contact Wyoming's Division of Unclaimed Property to retrieve his assets.

Since the incident, the netizen has been monitoring the Wyoming's Unclaimed Property Division website and found that he was not the only case; there were many similar situations, so it took the department 3 months just to organize these assets. After searching for several days, the netizen found his asset record and hurriedly sought various materials to attempt to claim it back. However, since he had forgotten most of the personal information from his previous registered account, he believed the chances of recovering the assets were slim.

Netizen's asset transfer record

What is Unclaimed Property?

According to the Coinbase website, when an account owner has not made any contact or engaged in any activity within a specified period under state law (usually 3-5 years), your funds will be confiscated, and they will be considered unclaimed or abandoned property.

Forms of unclaimed property include, but are not limited to, checking/savings accounts, brokerage accounts, 401k accounts, retirement fund accounts, and items in safety deposit boxes.

Similar issues frequently reported in Reddit community

On the other hand, many netizens have also complained about the same issue on the social forum Reddit, describing how their accounts were closed and assets transferred to the Wyoming Division of Unclaimed Property.

In many cases, it can be found that Coinbase closes accounts mostly because "the user established an account with Coinbase Kenya Ascending Markets, Ltd., which is now closed," and Coinbase stated that they attempted multiple times to contact the user through the verified email to notify them of the account closure, but received no response.

According to the images provided by the Xiaohongshu netizen "Chu," Coinbase customer service replied that his account was closed because he had established an account with Coinbase Kenya Ascending Markets, Ltd.

However, many Reddit users also criticized, saying: "The Coinbase app has no notifications," "The email description is unclear and does not explicitly state that the account will be closed"…

Coinbase customer service reply to Xiaohongshu netizen