Coinbase, the largest crypto exchange in the US, has come under fire as thousands of users claim it has terrible customer service. A CNBC report disclosed this news on August 24, claiming its journalists interviewed Coinbase users in the US and got thousands of complaints. Most of the complaints revolve around Coinbase failing to address cases of account takeovers that saw users lose their crypto holdings.
According to the report, the San Francisco-based exchange has continued to get complaints as it grew from a crypto trading platform to become the first crypto company in the US to go public. Since 2016, the exchange’s users have filed more than 11,000 complaints with the Federal Trade Commission and Consumer Financial Protection Bureau (CFPB). Reportedly, the bulk of these complaints target the company’s customer service.
While Coinbase claims to have over 2,100 full-time employees, the interviewed users aired their grievances, saying the exchange’s customer support team is either unreachable or unresponsive. An example is Tanja and Jared Vidovic, who got into crypto in 2017 through Coinbase. Over the years, their crypto holdings quadrupled to $168,596.
However, Tanja got a series of alerts about someone changing access to her crypto wallet earlier this year, before the attacker siphoned $168,000 worth of Bitcoin (BTC) and Ethereum (ETH) from her wallet. She tried to contact Coinbase to help her resolve this devasting ordeal but could not get even one of the 2,100 employees to come to her rescue.
Increasing cases of SIM swaps
Like the Vidovics, Ben, a Virginia resident that preferred to withhold his second name, lost thousands of dollars after logging into his Coinbase account in March. According to him, he verified his identity using two-factor authentication (2FA), but within a four-minute window, someone drained $35,000 in different cryptocurrencies from his account. After writing to Coinbase, the exchange informed him that his computer had been hacked and that there was nothing it could do.
Following this baffling response, Ben filed a complaint with CFPB. After a while, the entity responded by informing him that the Coinbase Regulatory Response team said transactions on the blockchain are irreversible and that the exchange’s insurance policy does not cover theft from individual accounts.
Shedding some light on what happened to Ben and the Vidovics, David Silver, an attorney that focuses on crypto cases, and whose firm represents the Vidovics, pointed to SIM swaps. According to him, SIM swaps allow hackers to access a target’s crypto in under 30 minutes.
He added that most clients complain about poor customer service after such attacks. This is because they witness their crypto slipping through their fingers, seeing as they cannot directly contact Coinbase to thwart the attack.
A case of biting more than you can chew
Coinbase’s massive expansion in such a short time forced it to change customer service practices, according to former employees of the exchange. For instance, Jason Rose, who worked part-time in the exchange’s customer service between 2014 and 2016, said the company communicated with customers through a live help chat at the time. This is because a lot of users at the time needed reassurance about crypto, and having someone guide them through completing complex crypto transactions helped.
He added that the live help chat served as a release valve for complaints, especially during times of extreme volatility. However, as the exchange’s user base expanded, it created a repository of answers to frequently asked questions (FQAs) to automate its customer service.
As he was exiting Coinbase in 2016, Jason said the exchange had started phasing out the live chat feature, forcing the customer service team to revert to emails. As a result, it took up to five days to deal with a problem that the live chat feature could have helped solve in under five minutes.
After years of complaints about its customer service, Coinbase announced that it intends to launch live chat messaging and phone support later this year. The exchange added that it is working on increasing the number of employees, specifically to its support team.