A significant number of Coinbase customers have filed complaints with the SEC saying that they lost thousands of dollars due to alleged mismanagement of the popular US cryptocurrency exchange.
According to filings with the SEC and a California state regulator compiled by Mashable, more than 115 complaints were categorized as “they have no way to reach them by phone,” “money was not available when promised,” and “they cut [off] all contact with its customers.” This is in addition to several, various shortcomings that could be easily considered a fairly fundamental issue for any financial entity.
In typical anecdotes, Coinbase users have voiced a litany of complaints about the San Francisco-based wallet and exchange startup: missing wires, unreleased cryptocurrency holdings, and disabled accounts, among many others. Some other users talked about unusual transactions taking place on their accounts. In some cases, these unauthorized transactions were so extreme that it drained their linked bank accounts below zero, resulting in hefty overdraft fees.
Similar issues have previously popped up on Reddit, forums, Twitter, and elsewhere.
Grievances are stacking up
According to 164 pages of complaints obtained by Mashable, one individual wrote to the SEC: “I am prevented from selling, buying, transferring or accessing my property. After repeated prompting via emails and phone calls, Coinbase advised me that I am locked out of my account as a result of a security software error on their end and that they would look into it. That was a month ago.”
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Another user of Coinbase was quoted as saying: “I am happy to take this as far as possible, socially, politically, and economically, if I do not receive what I am owed, or continue to receive no response from the company, both of which I’m sure are inevitable,” wrote the person in August. “If I can help to dismantle these frauds and protect any other people in America or abroad, I am more than happy to do so — just reach out.”
Throughout 2017, demand for the six-year-old company’s services has soared exponentially along with the price of cryptocurrencies themselves. Coinbase had 12 million users as of November 2017. At one point, the digital currency venue added 100,000 users in just 24 hours, continuing a record spurt lasting since CME Group announced plans to launch Bitcoin futures.
As complaints mount with regulators, the company made several attempts to address customer-service shortfalls. To contain the fallout, Coinbase said it would double its customer support teams and expand round-the-clock phone support to all customers.
Although many crypto exchanges offer similar services, Coinbase has been the go-to shop as it allows users to connect their bank accounts and thus use fiat money for transacting cryptocurrencies.
Earlier in August, the San Francisco startup secured a giant $100 million investment from several investors, giving the company a valuation of $1 billion and making it first ‘Bitcoin unicorn.’