Coinbase, one of the leading cryptocurrency exchanges in the US is currently under fire from its users for not being ready to handle increased demand.
Coinbase: A Victim Of Its Own Success?
This and other criticisms were documented by Mashable in a five-month-long Freedom of Information Act (FOIA) process. This yielded a total of 134 pages of complaints filed by users with the U.S. Securities and Exchange Commission (SEC) against Coinbase.
Digital media website Mashable obtained copies of the complaints received by the SEC and the California Department of Business Oversight filed by users of Coinbase. Widespread frustration and discontent are evident as the firm’s customer service fails to help resolve user issues.
This is not the first time Coinbase came under public scrutiny. In December of last year, traders accused the exchange of insider trading in the wake of the failed Bitcoin Cash (BCH) launch on GDAX. Last March, Coinbase was hit with a class-action lawsuit for violating California’s Unclaimed Property Law and conducting unlawful and unfair business practices.
Instead of a responsible leader in the crypto exchange industry, the complaints paint a picture of a firm unable to handle its own success.
A common theme observed in most of the complaints is the difficulty users experience accessing their funds. Many users experienced account lock-outs while others faced major issues transferring funds between different wallets.
Another big issue is Coinbase’s Customer Service. Complaints state that customer service is very slow to respond to user issues and often fail to react or provide reasonable expectations to their customers. The following complaint is particularly disturbing:
“I have sent 17,023.00 from my Coinbase account to another Coinbase account on 12.21.2017,” it reads. “The other Coinbase account never received the funds as of 1/16/2018. I have contacted Coinbase over 7 times and all they say is that they have so many issues, they will get back to me and it is been a month.”
The same customer also alleged he lost $5,000 because of this and said that “the company is holding my funds to make money on top of my investment.”
The complaints reveal customers who claim losses of thousands of dollars because of the alleged mismanagement by Coinbase.
When questioned about the complaints, a Coinbase spokesperson blamed existing issues to a surge in interest in cryptocurrencies and insisted the firm is taking steps to address the problems.
The Coinbase spokesperson added they have started improving customer service by nearly doubling their team and reducing the average response time to below 10 hours for more than 95 percent of incoming queries.
While Coinbase’s actions to resolve their issues are a major improvement, the company faces a difficult task ahead of them in rebuilding the trust and goodwill of their users.