The world’s most popular and trusted cryptocurrency exchange Coinbase is facing serious allegations from its users and has filed complaints with SEC saying that they have lost thousands of dollars due to the mismanagement by the exchange.
The development is extremely negative for the whole crypto community and for the Coinbase itself, as it is expanding its services at a very rapid pace. According the complaint filed with SEC and California state regulator complied by Mashable, more than 115 complaints were filed with the regulator and mostly were categorized under, “They have no way to reach them by phone,” “Money was not available when promised,” and “They cut [off] all contact with its customers.” There are several issues which are reported by users and most of them can be easily considered a fairly fundamental issue for any financial entity.
Most of the users of Coinbase has particularly voiced about missing wires, unreleased cryptocurrencies holdings, accounts suspension, unusual transactions on their accounts and many among others. Some cases include unauthorized transactions at the extreme level which drained linked bank accounts below zero that resulted in huge overdraft fees.
Mashable obtained the 164 pages of the complaint copy from SEC, where individual wrote:
“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.”
“Coinbase has been in possession of my funds ($21,000) since August 30th, 2017,” reads the complaint from September of last year. “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.”
“Coinbase suddenly and erroneously froze…my account [containing more than $100,000 of bitcoin] without explanation more than one month ago…Coinbase does not get back to you…Coinbase effectively cuts off consumers from their rightful property and forces risk of loss and lost profits.”
Coinbase userbase has exploded as the price of cryptocurrency has soared exponentially and has over 12 million users. Coinbase is preferred by many individuals over other exchanges as it allows linking up their bank accounts and use fiat to trade cryptocurrencies. Recently, it expanded its portfolio product by adding Ethereum Classic.
Similar issues had previously surfaced in social media channels on Reddit, Twitter and other channels. This is the first time when users directly approached SEC with their complaints. If the complaints against Coinbase are proved correct, then it will find itself in big trouble.
