As Bitcoin and other digital coins rise in popularity, so have the number of gripes with the largest cryptocurrency exchange in the U.S., according to a new study.
Coinbase was the most complained-about crypto digital wallet in the Consumer Finance Protection Bureau’s complaint database, according to a study done by the U.S. Public Interest Research Group, with the volume of filings — albeit starting at a low level — accelerating this year.
“Coinbase should be investigating consumer complaints in a timely manner, [and] it should be hiring staff to answer the phone," Ed Mierzwinski, senior director of the federal consumer program at U.S. Public Interest Research Group, told Yahoo Money. "Consumers say it isn't doing either.”
Since November 2019 through December 2020, Coinbase received just seven "mobile wallet" complaints each year. But starting this year through April, consumers filed more than five times that average each month, hitting a high of 62 in March. The increase follows the meteoric rise in value of many digital coins.
Most complaints revolved around issues managing, opening, and closing individual mobile wallet accounts. According to U.S. PIRG, of the Coinbase complaints that included narratives, 25% referenced bitcoin, 6% noted ethereum, and 6% mentioned litecoin.
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PIRG noted that many of the complaints claim issues when trying to retrieve money from the service. For instance, one person, who eventually received monetary relief, wrote that “Coinbase has my bitcoin stuck in a ‘vault’ unable to be accessed by me.” Another consumer wrote a similar complaint, saying “I have been trying to withdraw my coins out of the vault, but they are stuck.”
A vault is a digital wallet that can receive cryptocurrency, but has optional security features that add additional verification steps to withdraw funds. You can add funds to your vault by sharing your vault address or by transferring from your wallet to your vault.
Coinbase itself said it's beefing up its customer support when contacted by Yahoo Money about the study.
“In the past few months, we have quadrupled our capacity across our support team, and have delivered new technology and methods to resolve our customers’ most pressing issues faster,” a Coinbase spokesperson said.
Coinbase is not alone in complaints filed over cryptocurrency. Other buying and selling platforms recorded complaints such as EToro (31), Kraken (19), Robinhood (107), Binance.us (69), and Gemini (68), as investors rushed into the hot crypto market.
“Everybody thinks that if they buy crypto today it's going to be worth twice as much tomorrow, four times as much the next day,” Mierzwinski said. “I think the average consumer should not be in cryptocurrency.”