In documents obtained by Mashable under the Freedom of Information act, it has been revealed that 164 pages of complaints have been filed to the Securities and Exchanges Commission and the California Department of Business Oversight against San Francisco-based exchange Coinbase.
Multiple Coinbase users have accused Coinbase, one the of the largest and most popular crypto trading platforms, of a number of allegations. Thousands of dollars have been reportedly lost due to alleged mismanagement with some complaints even alleging the trading platform “stole” from its users, ignored customer complaints regarding missing funds and defrauded its users on a systematic basis.
A common theme among the many complaints filed with the SEC is the apparent disappearance of a potential trader’s money. Also, a recurring complaint is a seemingly aggressive indiffernece by Coinbase in response to any loss. According to the documents obtained by Mashable after a Freedom of Information process which took five months, 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.”
Coinbase exchanges fiat currencies with Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. It was founded in June 2012 by Brian Armstrong, Fred Ehrsam. As of November 2017, Coinbase had 13,300,000 users in around 32 countries. Its revenues for 2017 topped $1 billion dollars. Despite its size and popularity, there has been a number of complaints and bad reviews about Coinbase. In March 2018, it was reported that the number of monthly customer complaints against Coinbase, soared by over 100% to 889 in January of that year. Cciting official Consumer Financial Protection Bureau data, over 400 of those complaints were categorized as “money was not available when promised.”Although one of a few crypto exchanges offering very similarservices, Coinbase became the leading exchange as it permits customers to connect their bank accounts and therefore use fiat money to buy and sell digital currencies.
Coinbase Complaints
One complaint filed in January this year said:
“I have sent 17,023.00 from my Coinbase account to another Coinbase account on 12.21.2017. The other Coinbase account never received the funds as of 1/16/2018. I have contacted Coinbase over seven times and all they say is that they have so many issues, they will get back to me and it is been a month.”
Another complainant who alleged $5000 lost due to errors said:
“I believe the company is holding my funds to make money on top of my investment.”
Whist another complainant alleged ‘criminal activity’ by Coinbase, saying:
“Coinbase has been in possession of my funds ($21,000) since August 30th, 2017. They have effectively stolen my money at this point. They have no way to reach them by phone, and they are ignoring my repeated attempts to resolve this matter.”
Another angry complainant said:
“On December 13th 2017, I wired $1,000 from my Bank of America account to my Coinbase account. This was supposed to be a one day transaction… It is now more than a month. I see no sign of my funds. I have emailed many times, sent them the confirmation details from Bank of America, nobody will reply to an email, nobody calls me back. There is no way a 1-day transfer can take more than a month.”
Despite the gravity of the complaints, Coinbase has said that is has been trying to improve its service. It has put the problems down as teething problems, inevitable errors for a growing business, expanding at a very quick rate. However, the sheer volume and nature of the complaints suggests there needs to be a lot of work and improvement if Coinbase is to escape censure and punishment from the SEC and the California Department of Business Oversight.
