Coinbase Reduces Account Freezes and Launches DeFi Access for XRP and DOGE

Coinbase is making meaningful changes to improve both user experience and product offerings. The crypto exchange announced the launch of wrapped XRP and Dogecoin on its Layer-2 Base network, giving holders access to decentralized finance (DeFi) opportunities. At the same time, CEO Brian Armstrong reported an 82% reduction in unnecessary account freezes, addressing a long-standing user concern through improved machine learning infrastructure. 

Coinbase Slashes Account Freezes by 82% Amid Growing User Pressure and Data Breach Fallout

Coinbase CEO Brian Armstrong says the company has made major strides in solving one of its most persistent and controversial issues: unnecessary user account freezes. In a June 6 post on X, Armstrong revealed that the crypto exchange has successfully reduced such incidents by 82%, attributing the improvement to recent internal changes and new investments in technology.

“For longer than is acceptable, account restrictions have been a major pain point for Coinbase users,” Armstrong admitted. “We’ve now made it a top priority to fix it.” He added that the company is continuing to roll out improvements and encouraged users with frozen accounts to contact Coinbase Support directly.

For years, Coinbase users have complained about sudden and prolonged account freezes—often without clear explanations. Many said they were locked out of their funds for months, and in some cases, even years. These restrictions led to widespread user dissatisfaction, with some customers abandoning the platform altogether.

One X user, responding to Armstrong’s post, claimed they had been locked out for over two years, while another described enduring an eight-month freeze before giving up on Coinbase entirely. A common theme in these accounts is frustration with Coinbase’s customer service infrastructure. “It is extremely hard to speak to a live customer service person,” one user wrote. “It can take forever to track someone down.”

This customer service bottleneck has been compounded by another major blow to user trust: a recent data breach that compromised the personal details of over 70,000 Coinbase accounts. Illicit actors reportedly bribed overseas customer support agents to gain access to sensitive information such as government-issued IDs and home addresses. The breach occurred in December 2024 but was only disclosed in mid-May 2025.

Machine Learning and Internal Reforms

Coinbase credits much of the improvement in account freeze issues to new machine learning models and infrastructure upgrades spearheaded by Dor Levi, a product team member who joined the company just nine weeks ago.

In a separate X post, Levi explained that Coinbase had made “significant investments” to enhance the precision and recall of its fraud detection and compliance models. These efforts have directly resulted in fewer account restrictions and false positives.

Despite these advancements, both Armstrong and Levi emphasized that Coinbase will continue to impose account restrictions when legally required—such as in response to court orders or government sanctions—to remain in compliance with international laws.

Coinbase is also under intense scrutiny following revelations about a major data leak that exposed customer identities. According to reports, bad actors bribed international contractors to access Coinbase’s support systems, allowing them to download ID photos and sensitive contact information.

The fallout from this breach has been severe. One user claimed that a family friend lost both Bitcoin and Ether in a scam they believe was connected to the incident. Armstrong previously addressed the breach in a May 15 X post, promising that Coinbase would be “significantly strengthening” its internal controls and agent access protocols.

The Stakes Are High

With over 100 million registered users, Coinbase remains one of the largest crypto exchanges in the world. It is also the primary custodian for spot Bitcoin ETFs, making its operational integrity a crucial matter not just for individual users but also for institutional investors.

The company’s move to fix account freezes could go a long way toward restoring user trust, but only if followed through with consistent action. For now, the 82% reduction is a promising sign, but the platform’s critics are likely to remain skeptical until the remaining 18% of issues are also addressed and security practices are fully overhauled.

Coinbase Brings XRP and Dogecoin to DeFi on Base With New Wrapped Tokens

In related news, Coinbase, has also taken a major step toward expanding the decentralized finance (DeFi) ecosystem on its Layer-2 blockchain, Base. The company announced last week that wrapped versions of XRP and Dogecoin—cbXRP and cbDOGE—are now live on the Base network, opening the door for millions of token holders to generate yield through DeFi strategies.

This development allows holders of the original XRP and DOGE assets to earn returns from decentralized applications (dApps) without having to leave the Coinbase ecosystem. It’s a powerful blend of accessibility, interoperability, and scalability—three key pillars Coinbase has touted as central to Base’s vision since its launch.

A New Frontier for XRP and Dogecoin

Wrapped tokens are tokenized representations of cryptocurrencies that exist on networks where they are not natively supported. In this case, cbXRP and cbDOGE are ERC-20 compliant tokens on Base, backed 1:1 by their underlying assets, which Coinbase holds in secure custody. This ensures the wrapped tokens are fully collateralized and redeemable.

XRP, best known as the payments token powering Ripple’s cross-border settlement rails, and Dogecoin, the meme-born cryptocurrency that has developed a robust following and ecosystem, both historically lacked deep integration with Ethereum-compatible DeFi ecosystems. Base’s introduction of wrapped versions now changes that.

Coinbase said the move allows holders to participate in yield farming, liquidity provision, lending, and other DeFi protocols natively available on Base. Importantly, it means users can retain exposure to XRP and DOGE while layering on additional sources of yield.

Within just 24 hours of their launch, cbXRP and cbDOGE saw strong market interest. Data from blockchain explorer BaseScan shows that cbXRP surpassed a $5 million market cap, while cbDOGE is approaching the $2 million mark. These rapid inflows suggest significant demand from token holders eager to unlock new use cases beyond simple holding or trading.

The adoption of wrapped tokens for DeFi use is not new—Coinbase previously launched wrapped Bitcoin (cbETH and later cbBTC) on Base in September 2024, which has now grown into a major asset on the chain with a market cap of over $4.7 billion. With the success of cbBTC as a precedent, cbXRP and cbDOGE are expected to follow a similar growth trajectory, especially as Base becomes a more attractive hub for DeFi applications and developer activity.

Why Base?

Launched by Coinbase in early 2023, Base is a Layer-2 network built on the OP Stack, developed by Optimism. The network was created to offer a scalable, low-cost, and developer-friendly alternative to Ethereum’s mainnet while staying compatible with the broader Ethereum ecosystem.

Base has been instrumental in Coinbase’s strategy to bridge centralized finance (CeFi) and decentralized finance (DeFi). By bringing wrapped assets onto Base, Coinbase is ensuring that even holders of non-EVM-native assets like XRP and DOGE can participate in Web3 without the traditional pain points of complex bridging or high fees.

In doing so, Coinbase is also strengthening Base’s positioning against other Layer-2 contenders such as Arbitrum, Optimism, and zkSync.

For XRP and Dogecoin communities, the move represents a major step forward in utility expansion. While XRP has long been used in traditional financial infrastructure through RippleNet and its ODL (On-Demand Liquidity) product, its availability in DeFi has been limited.

Dogecoin, often dismissed as a meme coin, has steadily carved out a real presence in the market, backed by a passionate user base and integration into tipping systems and merchant payments. Its new wrapped version could reinvigorate interest from developers and DeFi projects looking to capture Dogecoin’s broad user appeal.

Both tokens now stand to benefit from liquidity pools, lending markets, staking derivatives, and DEX listings that can dramatically increase their functionality and relevance in the current DeFi landscape.

The Bigger Picture

Coinbase’s continued expansion into wrapped assets and Base integration is part of a broader strategic pivot toward Web3 infrastructure and passive income services. As traditional trading revenues face pressure from competition and regulation, DeFi and on-chain products represent a growth avenue for the exchange.

By offering a seamless pathway for retail and institutional users to explore DeFi with familiar assets like XRP, DOGE, and BTC, Coinbase is reducing the technical and psychological friction that has long slowed DeFi’s adoption.