A São Paulo state court applied Brazil’s Consumer Defence Code to a non-custodial wallet, placing the burden of proof on Coinbase for a transaction the company neither authorised nor executed.

A São Paulo state court has ordered Coinbase to refund approximately $100,000 to a user who had deposited funds in a self-custody wallet managed through the platform. The case stems from the unauthorised disappearance of those funds. Coinbase argued that, as a non-custodial wallet, the private key was under the user’s exclusive control and the company was not a party to the transaction.

Magistrate Ju Hyeon Lee rejected that defence by applying Brazil’s Consumer Defence Code, which places the burden of proof on the service provider. According to the court, Coinbase neither demonstrated that the wallet holder had authorised the movement of funds, nor documented the existence of security measures capable of preventing the incident. Because the amount claimed by the user was not disputed, the company was ordered to repay it in full, plus statutory interest.

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