You did everything right. You chose a reputable, well-known cryptocurrency exchange. You set up your account, secured your funds, and trusted the platform to protect your investment. Then, in an instant, it was gone. Drained by scammers. Stolen through a data breach. Vanished through fraudulent transactions that the exchange either failed to stop — or made far too easy to execute.
If this sounds familiar, you are not alone. And you may have a powerful legal claim. Licznerski Law, PLLC is taking on the biggest names in crypto — Coinbase, Crypto.com, and Kraken — and holding them accountable for the security failures that have cost everyday investors billions of dollars.
The Scale of the Problem Is Staggering
Cryptocurrency fraud has exploded into one of the most devastating financial crime epidemics in American history. According to the FBI’s 2025 Internet Crime Report, Americans filed over 181,000 cryptocurrency-related fraud complaints in 2025 alone, reporting losses exceeding $11 billion — a 22% increase from the year before. Investment fraud accounted for more than $7 billion of those losses, making it the single largest category of crypto crime.
These are not just numbers. Behind every statistic is a real person — a retiree who lost their life savings, a small business owner who lost operating capital, a family whose financial security was obliterated in a matter of hours. And in many of these cases, the platform that was supposed to protect them played a direct role in enabling the loss.
What the Exchanges Are Getting Wrong
Coinbase, Crypto.com, and Kraken are not small startups operating out of a garage. They are billion-dollar enterprises that handle enormous volumes of transactions daily, collect vast amounts of sensitive personal and financial data, and market themselves as safe, trustworthy places to store and grow your crypto assets. With that size and those promises come serious legal obligations — obligations these platforms have repeatedly failed to meet.
Coinbase suffered one of the most alarming security failures in the crypto industry’s recent history. A data breach that began in late 2024 — but went undetected for months — exposed the personal information of nearly 70,000 customers, including names, phone numbers, email addresses, masked Social Security numbers, and government-issued ID images. The breach stemmed from rogue overseas contractors who were allegedly bribed to hand over access to internal customer service systems. Once armed with that stolen data, criminals launched sophisticated social engineering attacks — impersonating Coinbase representatives, convincing victims their accounts were compromised, and instructing them to transfer their funds to “secure” wallets that were actually controlled by the scammers. Estimated losses from these attacks have been reported at over $400 million. Coinbase initially downplayed the scope of the incident, failing to promptly notify affected users and omitting key details about the insider involvement — conduct that may itself constitute a basis for legal liability.
Crypto.com has faced mounting criticism over its handling of unauthorized transactions and its customer service response when users report fraud. Victims have reported that the platform processed clearly suspicious transactions without triggering meaningful security alerts, froze accounts without explanation or recourse, and left users stranded without adequate support when fraud was reported. For a platform that aggressively markets the security of its ecosystem, the gap between promise and performance has been glaring.
Kraken, while also facing regulatory scrutiny from the SEC, has seen users suffer losses tied to account security failures and inadequate protections against social engineering attacks. The same wave of impersonation scams, SIM swaps, and phishing schemes that have devastated Coinbase users have hit Kraken customers as well — and the platform’s systems have not always proven up to the task of stopping them.
Common Scams These Exchanges Have Failed to Stop
Understanding how these frauds work is critical to understanding why the exchanges bear responsibility:
Impersonation Scams — Criminals contact victims by phone or email, posing as official exchange representatives. They warn the victim of a supposed security threat and instruct them to immediately move their funds to a “safe” wallet. That wallet belongs to the scammer. These calls often come from spoofed numbers that appear legitimate — a vulnerability the exchanges have done little to combat by warning or educating their users.
SIM Swap Attacks — Fraudsters convince a victim’s mobile carrier to transfer their phone number to a scammer-controlled device, allowing them to bypass two-factor authentication, reset passwords, and drain crypto accounts completely. Exchanges that rely solely on SMS-based authentication without additional safeguards have left their users dangerously exposed.
Phishing and Data Exploitation — When exchanges suffer data breaches and fail to promptly notify users, criminals weaponize that stolen information to craft highly convincing phishing attacks. Victims who might have ignored a generic phishing email become far more vulnerable when the attacker already knows their name, account details, and recent transaction history — all obtained from a compromised exchange database.
Fraudulent Transaction Processing — In many documented cases, exchanges processed large, unusual outgoing transactions without triggering fraud alerts, implementing transaction delays, or prompting verification — standard protective measures used by traditional financial institutions that crypto exchanges have been slow to adopt.
The Legal Framework: Why Exchanges Can Be Held Liable
Major crypto exchanges are not operating in a legal vacuum. They have clear, actionable duties to their users — and when they breach those duties, they can be sued. The legal theories available include:
Negligence — Exchanges have a duty to implement reasonable security measures to protect user accounts and funds. When they fail to vet contractors properly, ignore known vulnerabilities, rely on outdated authentication methods, or fail to detect and stop suspicious transactions, they breach that duty. If that breach causes you financial harm, you have a negligence claim.
Breach of Contract — Every user agreement on every major exchange contains promises about security, data protection, and the safeguarding of user assets. When an exchange markets “bank-level security” and then allows a bribed contractor to hand over thousands of customers’ personal data to criminals, that is a breach of the promises made to users.
Consumer Protection Violations — Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) provides powerful tools to hold companies accountable when they misrepresent the safety of their services or engage in deceptive practices that harm consumers. If an exchange publicly minimized a breach or misled users about the scope of a security incident, that conduct is actionable under Florida law.
Fraud and Civil Theft — In cases where an exchange’s negligence was so egregious as to cross into reckless indifference, or where internal actors were directly complicit in enabling theft, claims for fraud and civil theft may be available — potentially with enhanced damages.
The Arbitration Issue — And Why It’s Not a Dead End
Many exchange user agreements include mandatory arbitration clauses, which means users typically cannot file a traditional lawsuit in court. This sounds like a barrier — but it is not the end of the road.
Arbitration is a private, binding legal process that can move faster than court litigation and can result in significant damages awards. Experienced attorneys who know how to navigate arbitration before AAA and JAMS tribunals can be just as effective — sometimes more so — than courtroom litigation. The key is having a legal team that understands both the technical details of crypto fraud and the procedural demands of the arbitration process.
At Licznerski Law, PLLC, we know how to work within these frameworks to build compelling cases and recover real money for our clients.
How Licznerski Law, PLLC Fights These Cases
Taking on a company like Coinbase or Kraken is not a task for the unprepared. These are well-funded corporations with experienced legal teams and a vested interest in minimizing their liability exposure. Here is how Licznerski Law, PLLC levels the playing field:
Thorough Case Investigation — We dig into the full factual record: your account history, transaction logs, communications with the exchange, the timeline of any breach or scam, and the exchange’s public statements about security. We identify exactly where the platform failed you and document it in detail.
Technical and Expert Support — Cryptocurrency fraud cases require a command of blockchain forensics, cybersecurity standards, and the evolving regulatory landscape. We work with technical experts who can trace stolen funds on the blockchain and testify to the security failures that made the theft possible.
Aggressive Pursuit of All Damages — We pursue recovery for the full value of your stolen assets, consequential financial losses, and — where the exchange’s conduct warrants it — punitive damages. We do not settle for pennies on the dollar when the evidence supports a much larger recovery.
Florida Consumer Protection Claims — Florida law gives us powerful tools to pursue these cases on your behalf. FDUTPA and related statutes allow us to attack deceptive and negligent conduct by these platforms and, in some circumstances, recover attorney’s fees — making it even harder for exchanges to simply wait out victims who lack resources to fight.
Speed and Urgency — Cryptocurrency moves fast, and so do statutes of limitations. We move quickly to preserve evidence, secure your legal position, and get your case into the process before deadlines close the door.
Don’t Let Them Tell You There’s Nothing They Can Do
When victims of crypto fraud contact these exchanges, they are almost universally met with the same response: “We’re sorry, but cryptocurrency transactions are irreversible. There’s nothing we can do.” This is designed to make you feel helpless — to accept your losses and move on.
That response is not the end of the story. The transaction may be irreversible. The exchange’s liability is not.
If a platform’s security failures, data breaches, negligent practices, or broken promises made your loss possible, the law provides a path to recovery. Licznerski Law, PLLC is committed to walking that path with you — aggressively and relentlessly — until we achieve the outcome you deserve.
The Bottom Line
Coinbase, Crypto.com, and Kraken have built enormous businesses on the trust of their users. When they violate that trust — through negligent security practices, inadequate fraud protections, misleading representations, or outright failures to protect your data — there must be accountability. The billions of dollars lost by ordinary Americans to preventable crypto fraud is not just a market problem. It is a legal crisis that demands legal solutions.
Licznerski Law, PLLC is ready to be yours.
Contact Licznerski Law, PLLC today for a confidential consultation. If you’ve lost cryptocurrency through a scam, breach, or fraudulent transaction on Coinbase, Crypto.com, Kraken, or another major exchange, tell us your story. We’ll tell you whether you have a case — and if you do, we’ll fight like hell to win it.
Licznerski Law, PLLC — When Big Platforms Fail You, We Fight Back.