Information has recently emerged that shows 134 pages of complaints against Coinbase filed with the SEC. They show a disturbing pattern of Coinbase not returning investors’ funds, and general mismanagement.
The documents were procured by Mashable after a Freedom of Information Act process that lasted over 5 months. They detail the issues faced by customers on the exchange platform, with many counts of traders’ money simply disappearing.
This was primarily caused by the huge upsurge of customers seen by Coinbase after the uptick in the interest towards cryptocurrencies late last year.
On their growth, a Coinbase spokesperson said to Mashable:
“In 2017, the cryptocurrency space experienced a profound uptick in mainstream awareness and growth. As part of that, consumer demand for our services increased by 40x and we experienced transaction volumes in November and December of that year that grew by 295 percent.”
With a growth of this volume, it is only natural that they would struggle to find their feet. Moreover, they have allegedly attempted to clear and streamline feedback challenges. A spokesperson stated that they have decreased the backlog by 95%.
Even as these steps are being taken, some of the complaints raise issues that are meant to be tackled. A customer stated that they “sent 17,023.00 from my Coinbase account to another Coinbase account on 12.21.2017”, and that the account has not received the funds almost 1 month afterwards, on 16th January 2018. Even after contacting the exchange “over 7 times”, the customer has not resolved the issue. The customer said:
“I believe the company is holding my funds to make money on top of my investment…[the] customer service reps keep telling me they forwarded my complaint to another department which I don’t know if it exist”.
Another customer believes Coinbase has stolen their life savings. He said:
“Coinbase have locked me out of my account for weeks. I have attempted almost 30 times to complete their account verification process…but I still do not have access to my funds…I am starting to believe that they have stolen my money.”
Another customer, who was locked out his account which contained around 10 Bitcoin [BTC], stated that they do not have the ability or infrastructure to meet the customers’ needs. The customer said:
“Coinbase does not get back to you…telling an existing customer that a minor technical issue that is cutting him off from his property cannot be timely handled because Coinbase would like to increase its influx of new customers…they do not have the necessary resources to address even the most basic customer inquiries or to address technical issues arising from their system.”
Another customer declared outright war against the platform, 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. 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.”
It is left to see how Coinbase will react to the news of their customer complaint backlog made public.