Coinbase, the largest US-based exchange, is taking steps to rebuild user trust amid one of its most controversial issues: account freezing.
Users have complained about unnecessary account freezes and unsuccessful recovery attempts despite submitting complete KYC (Know Your Customer) documents.
Has Coinbase resolved the account freezing issue?
Coinbase CEO, Brian Armstrong, announced a significant breakthrough in one of the platform's most controversial issues: unnecessary account freezing.
According to Armstrong, the company has reduced account restrictions by 82%. This move could change how both small investors and businesses perceive the exchange.
The CEO of Coinbase exchange credited this achievement to Dor Levi, a new platform employee tasked with reforming the restriction system.
Based on comments on X (Twitter), account freezing has long been a headache for Coinbase users. Some argue that verification processes are lengthy and unclear.
Complaints have ranged from account locks lasting weeks to repeated KYC requests, even after previous submissions.
"My account was frozen for weeks despite submitting all required KYC documents... This is causing real financial harm to many previously loyal users," wrote Hunter, ecosystem development/investment lead at Tron.
Dor Levi, who joined Coinbase nine weeks ago, detailed his team's reforms. He explained that improvements in machine learning (ML) models, enhanced infrastructure, and the addition of self-service tools in the app have allowed Coinbase to reduce freezing frequency without compromising compliance.
"Account freezing should be rare, limited to necessary situations, primarily when we have legal obligations... or protecting users... We have invested significantly in ML models, infrastructure, and our team... Most restrictions will soon be resolved through self-service flows—much more efficiently than before," Levi emphasized.
New Leadership and ML Tools Drive Progress, but Old Issues Persist
However, despite viewing this progress as a potential turning point, industry insiders welcome the update with cautious optimism.
"Love this Brian. This has been a major perception issue for Coinbase. Personally, I stopped using Coinbase due to the barriers to unlocking my account," said Mondoggg, co-founder of Resonance Lab.
Influencer Alex Becker agreed, suggesting this feature could attract users to Coinbase, potentially positioning it as a "corporate bank account."
However, damage to Coinbase's reputation among small investors remains significant, indicating that Coinbase still has a long way to go in rebuilding credibility for this customer segment.
With an 82% reduction already achieved and promises of more updates, the question is whether Coinbase can fully restore its reputation not just as a cryptocurrency exchange, but as a safe, functional platform for businesses to store and move capital confidently.
"Damage has been done to small investors," crypto YouTuber Wendy O commented.
Wendy also noted that her large audience has negative feelings about the platform. Additional comments also point to pending or unresolved cases.
"My account was restricted because I couldn't provide a MetaMask wallet ownership statement I used to deposit stablecoins into Coinbase," BitPay co-founder Tony Gallippi wrote.
Although Coinbase appears to be taking decisive steps to address its long-standing restriction issue, the path to rebuilding user trust remains long.
