$1.3M USDC Freeze on Coinbase Triggers Liquidation Fears
A Coinbase user claimed that $1.3 million in USDC became inaccessible shortly after being deposited into an account, preventing the trader from transferring collateral to Hyperliquid before a leveraged position was liquidated.
The alleged incident occurred on August 9, when the user attempted to deposit the funds into a Coinbase account that had been inactive for several years. According to the post, the account holder intended to withdraw the stablecoin over Arbitrum.
However, Coinbase allegedly restricted access to the funds and requested documentation within minutes of the deposit. The user claimed that they submitted the necessary material, but the restriction remained in place for 16 hours, allowing the Hyperliquid position to be liquidated.
Critics argue that traders using large amounts of leverage assume that exchanges, blockchains, compliance systems, and withdrawal infrastructure will function without interruption when relying on a last-minute collateral transfer. The incident highlights the risks associated with leveraged trading and the importance of having sufficient collateral readily available.