Frustrated Coinbase customers have accused the digital currency exchange of fraud in complaints filed with the SEC.
Desperate Coinbase customers have lodged formal complaints with the US Securities and Exchange Commission (SEC), accusing the San Francisco-based cryptocurrency exchange of fraud, according to documents Mashable has obtained under a Freedom of Information request.
Coinbase has grown quickly to become one of the world’s leading and most trusted digital currency exchanges. However, the complaints submitted to the SEC and the California Department of Business Oversight paint a picture of an irresponsible actor “overwhelmed by and underprepared for its own success,” as Mashable put it.
The website cited a customer who filed a complaint in January this year as saying:
“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 customer claimed to have lost $5,000 because of errors in the Coinbase system. That customer stated:
“I believe the company is holding my funds to make money on top of my investment.”
Others also seem to harbor such suspicions, with the report noting that a number of Coinbase customers say the exchange has been “intentionally withholding” their money to reinvest in other business.
One complaint submitted with the California Department of Business Oversight and referred to the SEC for further action accused Coinbase of “acting criminally.”
The complainant said:
“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 one said that numerous attempts to get in touch with a representative of Coinbase resulted only in “form emails” in response, and this individual claims that the digital currency exchange has “stolen” a “majority of [their] life savings.”
Two class action lawsuits were filed against Coinbase at the start of March, one alleging insider trading and the other accusing the operator of violating California’s Unclaimed Property and Unfair Competition laws.
The plaintiffs in the case filed on March 1 accuse the cryptocurrency exchange of allowing its employees to trade digital currency based on information that is not publicly available. The class action suit filed the next day charged Coinbase with forcing users to set up accounts to redeem digital assets sent to them through their email addresses. Since the exchange failed to make it clear it would hold the cryptos until the receiver opened an account, the company engaged in unfair business practices and violated the plaintiffs’ property rights, the lawsuit argues.