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SEC Sees No End to Complains About Coinbase

SEC Sees No End to Complains About Coinbase 101
Source: Patrick Brinksma/Unsplash

Coinbase, US-based cryptocurrency exchange, may sound like a trustworthy name in the cryptoverse, but recent allegations against it show it in a more sinister light: a series of complaints filed with the U.S. Securities and Exchange Commission (SEC) show multiple users claiming to have had issues with the platform. These include huge ones, like claims that Coinbase “stole” cryptocurrency holdings from its users and continuously defrauded them.

According to 134 pages of complaints obtained by Mashable, users have repeatedly run into troubles with the exchange. Mashable describes Coinbase as seeming to be “a company overwhelmed by and underprepared for its own success” thanks to what these complaints cite.

Some of the complaints include:

  • “Coinbase has not credited [$21,000 wired to my account], and has not responded to my multiple attempts to contact them to get this issue resolved. I now believe that they are acting criminally.”
  • “Coinbase accepts money from users under the pretense of being able to return gains, but systematically disallows that ability once tested...and then cuts [off] all contact with its customers.”
  • “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 has already acknowledged that they are not always quick to respond to customer complaints in the past due to the speed with which they’ve gained customers. In an email, a representative for Coinbase told Business Insider that the company was proactively tackling any issues with customer complaints. Since the company has hired more support staff in the past few months, they have been quicker to address issues and get back to customers.

However, as Coinbase plans further aggressive expansion it may need to hire even more support staff. For example, the company is reportedly close to securing registration with the US Securities and Exchange Commission (SEC) as a so-called ‘broker-dealer’. It could open the door for many more digital assets being listed on the platform. Also in June, Coinbase announced that they are launching an office in Japan, “as part of our effort to accelerate the global adoption of cryptocurrency.” Moreover, Coinbase is strengthening its positions in other regions, too. In March, the UK's Financial Conduct Authority granted Coinbase an e-money license, which will also be extended beyond the UK to 23 countries within the EU. It means that Coinbase is allowed to issue e-money and provide payment services in the UK.

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