Coinbase Responds to Accusations of Unauthorized Credit Card Charges
- VISA and Worldpay have taken responsibility for the incidents and are working with banks to restore the charges
One of the largest cryptocurrency exchanges in the world, Coinbase, is undergoing a difficult time in replying to multiple complaints online. The company has today posted an official statement on Reddit responding to various accusations that users have posted on the forum.
Update: A joint statement by VISA and Worldpay has been posted on the website of Coinbase.
“Over the last two days, some customers who used a credit or debit card at Coinbase may have seen duplicate transactions posted to their cardholder accounts. This issue was not caused by Coinbase,” the statement reads.
Official Response
This being the internet, however, no verification can be made and the comments can well be posted by competitors. An official from the company shared a post that elaborated on the issue in detail.
Coinbase states: “We can confirm that the unexpected charges are originating from our payment processing network, and are related to charges from previous purchases. To the best of our knowledge, these unexpected charges are not permanent and are in the process of being refunded.”
“We are running joint investigations with all parties involved and will provide updates as we receive them. We apologize for the trouble, and are working as quickly as possible to help anyone affected by this,” the official statement concludes.
Update: Following that investigation and the post from VISA and Worldpay, the payment companies and the card-issuing banks have ensured that the duplicate transactions have been reversed. Customers should be expecting the reimbursements on their accounts shortly.
The statement from Visa and Worldpay elaborates: “All reversal transactions have now been issued, and should appear on customers’ credit card and debit card accounts within the next few days. We believe the majority of these reversals have already posted to accounts. If you continue to have problems with your credit or debit card account after this reversal period, including issues relating to card fees or charges, we encourage you to contact your card issuing bank. We deeply regret any inconvenience this may have caused customers.”
Reputation Damage
Some users are reporting that their transactions have already been reversed, while others are expressing outrage. The company has asked the community on Reddit to post some specific details about the charges they incurred.
Some users are sharing that the double charge has left their accounts empty. Others are threatening lawsuits if their funds are not returned shortly.
The incident appears to have become a PR nightmare for the top crypto exchange, as multiple topics have been posted on Reddit. Many users claim that their withdrawal requests have been pending for many days.
Crisis Management and Communication Issues
Major cryptocurrency exchanges have lately been subjected to different types of problems. Back in December and January, Kraken was struggling with upgrading its software and went offline for 2 days before coming back partially functional. The firm did not do a good job at actively communicating with its customers, exposing the problems that the immature industry is facing.
Earlier this month, Binance went offline with no explanation for hours, before its CEO tweeted that the exchange was subjected to a DDoS attack. The company’s official Twitter account was claiming that the exchange is upgrading its infrastructure.
Adequate Customer Service Bottlenecked by Rapid Growth
The number of clients that cryptocurrency exchanges have is outpacing their ability to hire the adequate number of employees to support their operations. Traders that come from other industries are accustomed to very quick responses and are not tolerating long waiting times.
As with any new industry that is booming, as the companies scale up to the next level in their business development, they are facing new operational challenges. The latest bout of trouble for Coinbase is an opportunity to address the challenges in a timely manner and move forward.
Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term Knocking on the Door
The regulatory bodies across the globe are already looking at the crypto space and are likely to become more active in the coming months. Every incident that prompts client outrage will result in more and more regulatory attention.
Banks on their part are likely to express extreme caution when dealing with counterparts that are offering cryptocurrency services. When a fraudulent charge is made on a client’s credit or debit card, commercial banks are typically refunding clients that have lost their funds due to hacking.
However, when dealing with crypto exchanges, the traditional banking industry might not be as cooperative, in order to highlight some of the risks associated with the unorthodox gold rush of the 21st century.
One of the largest cryptocurrency exchanges in the world, Coinbase, is undergoing a difficult time in replying to multiple complaints online. The company has today posted an official statement on Reddit responding to various accusations that users have posted on the forum.
Update: A joint statement by VISA and Worldpay has been posted on the website of Coinbase.
“Over the last two days, some customers who used a credit or debit card at Coinbase may have seen duplicate transactions posted to their cardholder accounts. This issue was not caused by Coinbase,” the statement reads.
Official Response
This being the internet, however, no verification can be made and the comments can well be posted by competitors. An official from the company shared a post that elaborated on the issue in detail.
Coinbase states: “We can confirm that the unexpected charges are originating from our payment processing network, and are related to charges from previous purchases. To the best of our knowledge, these unexpected charges are not permanent and are in the process of being refunded.”
“We are running joint investigations with all parties involved and will provide updates as we receive them. We apologize for the trouble, and are working as quickly as possible to help anyone affected by this,” the official statement concludes.
Update: Following that investigation and the post from VISA and Worldpay, the payment companies and the card-issuing banks have ensured that the duplicate transactions have been reversed. Customers should be expecting the reimbursements on their accounts shortly.
The statement from Visa and Worldpay elaborates: “All reversal transactions have now been issued, and should appear on customers’ credit card and debit card accounts within the next few days. We believe the majority of these reversals have already posted to accounts. If you continue to have problems with your credit or debit card account after this reversal period, including issues relating to card fees or charges, we encourage you to contact your card issuing bank. We deeply regret any inconvenience this may have caused customers.”
Reputation Damage
Some users are reporting that their transactions have already been reversed, while others are expressing outrage. The company has asked the community on Reddit to post some specific details about the charges they incurred.
Some users are sharing that the double charge has left their accounts empty. Others are threatening lawsuits if their funds are not returned shortly.
The incident appears to have become a PR nightmare for the top crypto exchange, as multiple topics have been posted on Reddit. Many users claim that their withdrawal requests have been pending for many days.
Crisis Management and Communication Issues
Major cryptocurrency exchanges have lately been subjected to different types of problems. Back in December and January, Kraken was struggling with upgrading its software and went offline for 2 days before coming back partially functional. The firm did not do a good job at actively communicating with its customers, exposing the problems that the immature industry is facing.
Earlier this month, Binance went offline with no explanation for hours, before its CEO tweeted that the exchange was subjected to a DDoS attack. The company’s official Twitter account was claiming that the exchange is upgrading its infrastructure.
Adequate Customer Service Bottlenecked by Rapid Growth
The number of clients that cryptocurrency exchanges have is outpacing their ability to hire the adequate number of employees to support their operations. Traders that come from other industries are accustomed to very quick responses and are not tolerating long waiting times.
As with any new industry that is booming, as the companies scale up to the next level in their business development, they are facing new operational challenges. The latest bout of trouble for Coinbase is an opportunity to address the challenges in a timely manner and move forward.
Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term Knocking on the Door
The regulatory bodies across the globe are already looking at the crypto space and are likely to become more active in the coming months. Every incident that prompts client outrage will result in more and more regulatory attention.
Banks on their part are likely to express extreme caution when dealing with counterparts that are offering cryptocurrency services. When a fraudulent charge is made on a client’s credit or debit card, commercial banks are typically refunding clients that have lost their funds due to hacking.
However, when dealing with crypto exchanges, the traditional banking industry might not be as cooperative, in order to highlight some of the risks associated with the unorthodox gold rush of the 21st century.