Coinbase hit by surge of customer complaints in 2017: report

2017 has been a banner year for the San Francisco-based startup, which recently attained the “unicorn” status after raising $100 million in a Series D funding round. But the popular digital currency exchange has also seen an increase in customer complaints this year, according to the U.S. Consumer Financial Protection Bureau (CFPB).

Data from the CFPB website showed that the U.S. regulator has received at least 332 complaints about Coinbase as of Aug. 30. This is compared to the six complaints lodged against Coinbase for all of 2016, according to CFPB.

The complaints ranged from transaction problems and service problems to “money was not available when promised,” “unexpected or other fees,” and even fraud or scam. In June, one customer told the CFPB that he/she fears he/she “may have scammed into investing money into something that either does not work or is purposely trying to deceive me, while a customer complaint lodged in July reported that the “site magically goes down for ‘maintenance’ every time it’s an opportunity to buy.”

Overall, the CFPB has received more than 1,400 complaints under the “money transfer, virtual currency, or money service” category since the beginning of 2017. Majority of the complaints were directed at Coinbase, but there were also reports that were aimed at Paypal Holdings and banks like JPMorgan Chase and Bank of America.

In the past couple of months, Coinbase has been struggling to keep up with the surging volume and longer transaction processing times. The exchange also had to cease its operations in Hawaii after the state’s Division of Financial Institutions required the company to maintain cash reserves equivalent to bitcoin’s cash value as redundant collateral. Coinbase is also in the middle of a legal battle with the U.S. Internal Revenue Service, which is after the exchange to submit records of all transactions that took place from 2013 to 2015.

Coinbase also caught the ire of many of its customers after it decided not to support Bitcoin Cash, prompting the exchange to announce that it will introduce support for the new digital currency by January 1, 2018, “assuming no additional risks emerge during that time.”

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