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

Coinbase is actively enhancing its user experience and expanding its product offerings. The cryptocurrency exchange recently announced the launch of wrapped XRP and Dogecoin on its Layer-2 Base network, granting holders access to decentralized finance (DeFi) opportunities. Simultaneously, CEO Brian Armstrong reported an 82% reduction in unnecessary account freezes, addressing a significant user concern through improvements to their machine learning infrastructure.

Coinbase Slashes Account Freezes by 82% Amid User Feedback and Data Security Concerns

Coinbase CEO Brian Armstrong announced that the company has made significant progress in resolving a long-standing issue: unwarranted user account freezes. In a June 6 post on X, Armstrong revealed an 82% reduction in such incidents, attributing the improvement to recent internal adjustments and technological investments.

"For longer than is acceptable, account restrictions have been a major pain point for Coinbase users," Armstrong acknowledged. "We’ve now made it a top priority to fix it." He also mentioned that the company is continuing to implement improvements and encouraged users with frozen accounts to contact Coinbase Support directly.

For years, Coinbase users have voiced concerns about sudden and prolonged account freezes, often lacking clear explanations. Many reported being locked out of their funds for extended periods, sometimes even years. These restrictions led to widespread user dissatisfaction, prompting some customers to abandon the platform.

One X user, responding to Armstrong’s post, claimed to have been locked out for over two years, while another described an eight-month freeze before ultimately leaving Coinbase. A recurring 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 challenge has been compounded by a recent data security incident that compromised the personal details of over 70,000 Coinbase accounts. Unauthorized individuals reportedly bribed overseas customer support agents to access sensitive information, such as government-issued IDs and home addresses. The incident occurred in December 2024 but was disclosed in mid-May 2025.

Machine Learning and Internal Reforms

Coinbase attributes much of the improvement in account freeze issues to new machine learning models and infrastructure upgrades led by Dor Levi, a product team member who joined the company recently.

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 scrutiny following revelations about a data leak that exposed customer identities. According to reports, unauthorized individuals bribed international contractors to access Coinbase’s support systems, allowing them to download ID photos and sensitive contact information.

The aftermath of this incident has been significant. 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, 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 cryptocurrency exchanges globally. It is also the primary custodian for spot Bitcoin ETFs, making its operational integrity crucial not only for individual users but also for institutional investors.

The company’s efforts to address account freezes could significantly contribute to restoring user trust, but only if consistently implemented. While the 82% reduction is a promising indicator, critics may remain skeptical until the remaining issues are resolved and security practices are fully enhanced.

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

Coinbase has also taken a significant step in expanding the decentralized finance (DeFi) ecosystem on its Layer-2 blockchain, Base. The company announced that wrapped versions of XRP and Dogecoin—cbXRP and cbDOGE—are now available on the Base network, opening avenues for token holders to generate yield through DeFi strategies.

This allows holders of the original XRP and DOGE assets to earn returns from decentralized applications (dApps) without leaving the Coinbase ecosystem. It’s a combination of accessibility, interoperability, and scalability—three pillars Coinbase has emphasized 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 instance, 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, known as the payments token powering Ripple’s cross-border settlement rails, and Dogecoin, the meme-born cryptocurrency that has developed a strong following and ecosystem, historically lacked deep integration with Ethereum-compatible DeFi ecosystems. Base’s introduction of wrapped versions changes this.

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

Within 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 inflows suggest significant demand from token holders eager to unlock new use cases beyond 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 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, 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 remaining 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 challenges of complex bridging or high fees.

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 significant step forward in utility expansion. While XRP has been used in traditional financial infrastructure through RippleNet and its ODL (On-Demand Liquidity) product, its availability in DeFi has been limited.

Dogecoin, often seen as a meme coin, has steadily established a 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 increase their functionality and relevance in the DeFi landscape.

The Bigger Picture

Coinbase’s expansion into wrapped assets and Base integration is part of a broader strategic move 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 assets like XRP, DOGE, and BTC, Coinbase is reducing the technical and psychological barriers that have slowed DeFi’s adoption.