Coinbase Faces Lawsuit Over $2.8 Million Frozen in Pensioner's Account

A 74-year-old pensioner from Spain has filed a lawsuit against Coinbase in Ireland's Commercial Court over $2.8 million frozen in his account. Ali Asghar Afrouz claims Coinbase gave him conflicting explanations for why his account was frozen and wants the money back.

Afrouz sold a beachfront property in Iran for around $3 million in 2022 and moved the proceeds into cryptocurrency. He then found his Coinbase account frozen, with the exchange citing a warrant from U.S. authorities as the reason. However, Afrouz disputes this account and wants the money back, plus an injunction to restore his access to the funds.

This is not an isolated case, as a Reddit thread describes a similar experience with over $900,000 locked inside a closed account. The exchange has closed accounts with balances in the six- and seven-figure range with little warning and less explanation.

Coinbase closed around 250,000 customer accounts in 2024, liquidating the crypto in them, under Wyoming's unclaimed-property law. Funds in dormant accounts can be converted to cash and handed to the state treasurer rather than returned directly to the customer.

This is not a new issue, as a class action lawsuit was filed against Coinbase in 2021 over similar complaints of frozen accounts. The exchange's compliance and security systems can freeze an account faster than its support team can explain why, or fix it.