New York - The most popular online exchange for trading digital
currencies is generating a surge in customer complaints this year even as investors are lured by a dramatic rise in prices.
The US Consumer Financial Protection Bureau has received at least
293 complaints about Coinbase, according to data reviewed by
Bloomberg. That compares with about six complaints for all of 2016, and
makes Coinbase the biggest recipient of CFPB virtual currency complaints
The website has struggled to keep up with spiking volume and
longer transaction processing times as the value of bitcoin and other
cryptocurrencies soared to record highs.
More than a third of the grievances came from individuals who said
they were unable to access their money when promised. Many people also
complained about other transaction or service problems. Accusations of
fraud represented less than 15% of the complaints.
"The funds were supposed to be transferred to my checking account
within three-to-five business days," one customer complained to the CFPB
in May. "I need the money."
Megan Hernbroth, a spokesperson for San Francisco-based Coinbase, declined to comment on the CFPB complaints.
Since the beginning of 2017, the CFPB has received more than 250
complaints under the "virtual currency" category. About 60% of
those were directed at Coinbase, while many of the others were aimed at
PayPal and large banks.
Coinbase, which was founded in 2012, said in June that it’s working
to improve customer support. The exchange has grappled with a slew of
performance issues, including outages, slow load times and a
flash crash in ether, the second most valuable virtual coin.
"Over the past few months, we’ve seen an unprecedented increase in
the number of customers signing up to use Coinbase," wrote the company’s
co-founder and CEO,
Brian Armstrong, in a June 6 blog post. "As a result, our systems have
been pushed to the limit. This has caused many customers to have a
On its support page, Coinbase says transaction timing can vary
depending on a customer’s location and payment method, and US bank
transfers can take up to five business days.
LendEDU, a New Jersey-based student loan marketplace, pointed out the
increase in virtual currency complaints this year, in a report earlier
Cryptocurrency startups have been overwhelmed with unusually high
volume as the price of bitcoin has skyrocketed almost fivefold this
year. This month, the debate over how to speed up transactions became so
contentious that bitcoin
split in two.
The CFPB, which didn’t respond to multiple requests for comment,
started accepting complaints about virtual currencies in 2014, warning
consumers about unclear costs, scams and lost funds.
Three years later,
the Securities and Exchange Commission
said that cryptocurrency exchanges and companies that raise money
through the sale of digital assets must adhere to federal securities
laws, signaling a clampdown on the recent surge in virtual coin
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