Coinbase Customers Are Furious Over Response to Hacked Accounts and Stolen Funds

Photo illustration in Ukraine - 23 May 2021
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Coinbase customers have a lot to say about the nation’s largest cryptocurrency exchange platform. Interviews and thousands of complaints have revealed a pattern of account hacks where users have reported money vanishing from their accounts, reports CNBC. Then, when customers try to contact Coinbase support, they’re met with less than stellar customer service.

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Coinbase has a market cap of about $65 billion, more than 68 million users in over 100 countries, over 2,100 full-time employees and $223 billion in held assets, according to the company.

Once criminals gain access to an account, funds can be drained within minutes. According to the FBI, transactions cannot be reversed, CNBC reports.

Retired U.S. Secret Service Agent Gus Dimitrelos told ABC Action News that cryptocurrency theft is one of the fastest-growing cyber-crimes. “There is no FDIC for the crypto world. You’re on your own. It’s still the wild, wild west,” Dimitrelos said. “This year, I’ve done more cryptocurrency fraud investigations than all other years combined. It’s because that’s where the money is today.”

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Although the crypto exchange platform went public in April, complaints have been coming in since 2016. More than 11,000 complaints have been filed against Coinbase with the Federal Trade Commission and Consumer Financial Protection Bureau, mostly related to customer service. Former employees also told CNBC that the company’s customer service practices changed over time and representatives are struggling to keep up with demand.

CNBC noted that SIM swapping, where criminals take control of a victim’s phone number and SIM card through their phone company, is largely to blame for many of the cryptocurrency thefts. According to Etay Maor, senior director of security strategy for cybersecurity company Cato Networks, once hackers break into Coinbase accounts, they can put them up for sale on the dark web. Coinbase accounts can sell for $100 to $150, CNBC reported.

After reviewing 1,128 complaints over the past three years, the Better Business Bureau determined that the company has a “pattern of complaints from customers who state they are locked out of their accounts, even after providing required information or updates.”

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Alma Galvan, a marketing and communication manager with the BBB, told CNBC that the group has not received a response about the situation after sending a letter to Coinbase regarding customer complaints.

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Last updated: August 25, 2021

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Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
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