Lawmakers force exchanges to host servers in special datacenters, to hire security consultants, and to collect identity documents, and yet there are few or no regulations that govern how quickly money services businesses must deal with customers' money issues . It's time that these regulations mandate that Coinbase and other exchanges be required to respond to support tickets within a few weeks. But even if that isn't likely to happen, I think it's important to get this message distributed as widely as possible so that Coinbase's investors read it. Coinbase is constantly trying to close funding rounds, and their investors need to be made aware that the company they are valuing at over a billion dollars has shaky fundamentals.
Our latest saga with Coinbase began sometime in mid-September, when both the OAuth2 application that provides dollar payouts to customers for their mining rewards, and the API access that allows us to obtain receive addresses to send mined blocks to Coinbase, suddenly started to return error messages. In the case of the OAuth2 application, the error message states "OAuth2 application is disabled." In the case of the API calls, a 401 error is returned, with the text "Your account has been locked, please visit coinbase.com to resolve."
We are 100% certain that our system did not cause these errors, because there were no releases or configuration changes for days around the time the problem began. Our first step, of course, was for Chris to create what I thought was a pretty straightforward support ticket:
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Hello. I have been using an OAuth application through Coinbase to send money. It has worked fine until two days ago, when I began receiving the error "OAuth application has been disabled". I have not changed anything with the application, but Coinbase has changed something causing it to no longer work. Can you please fix this for me? Thank you for your help.
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Coinbase payouts are offline due to an error in the Coinbase API. We have contacted Coinbase to resolve this issue (Case ID #4881645), and we are still awaiting a reply from them. We will issue Coinbase payouts as soon as they fix the issue. Bitcoin payouts to wallet addresses are still operating normally.
Our final attempt at contacting them was in an October 8 ticket. In this ticket, I reminded Coinbase of the previous ticket and asked them for assistance. I also gave them plenty of time to avoid our having to take the issue public:
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Hi, At the end of September, we began to receive a message stating "Your account has been locked, please visit coinbase.com to resolve" when we attempted to query the Coinbase API to obtain a receive address. Nobody had made any changes to this account or to the code calling the API at the time the message began to be returned from Coinbase's servers. The method being called is "account/generate_receive_address" and no parameters are being provided. It has been called this way and worked from 2014 until September 2018. In ticket 4881645, my brother requested support on this issue and did not receive a response. Later, he called Coinbase and the support representative stated that the cause of the problem was a lack of identity verification. I successfully verified the account, but the error has persisted. The level of support Coinbase is providing on this issue is unacceptable. It should not take multiple weeks to reply to a ticket like this one. All I want to know is what the issue is so that I can resolve it. If the problem is that my identity still is not fully verified, then please tell me what additional documentation is required to unlock the account. If additional investigation is required, then surely it isn't difficult to simply inform me when I can expect a reply. If I don't receive a response by tomorrow, October 9, then I'm going to publicize this issue on the @ProHashing twitter feed, the Prohashing Blog, and on other social networking sites. I urge Coinbase to please reply to this message so that we can figure out what is wrong here, even if the reply is simply to provide a date I can expect the issue to be addressed. Thanks, -Steve Sokolowski
Coinbase is a company that earns billions of dollars in revenue, and their executives are pocketing millions. They write blog posts about how they are improving the quality of their support. Earlier in the year, when the price of every coin was exploding, it was reasonable for them to be given more time to hire and train more support agents - especially given that the economy was so overheated that it is very difficult to hire anyone. But it's been close to a year since exchange volumes peaked, and Coinbase is no closer to resolving its support tickets in a timely fashion than it was back then. The only reasonable conclusion at this point is that the company has made an intentional decision to hire only enough support representatives to post automated replies that often aren't related to the subject at hand. They are willing to pad their pockets while customers' money is in limbo because their support representatives are understaffed, untrained, and given too little authority to actually resolve issues.
A company with such poor support should not be permitted by authorities to ignore 6,128 users of this application for 24 days.
But even if we look at this issue from a business standpoint, they've already lost $5,000 in trade fees alone from us that have gone to Bitflyer in the past year; if we count the ten people who had accounts who I personally recommended switch exchanges, it's probably twice that - and that's just me. This is what potential investors in Coinbase need to know. The company is so poorly managed that they have lost a million dollars of trade volume and are giving the runaround to 6,128 other people who are becoming more and more negative about Coinbase in the tickets they submit to us every day - all because their support can't be bothered to reply. How do they value the cost of a support ticket? Any smart investor should know that it doesn't cost $10,000 or $20,000 to reply to four or five tickets over the course of a year.
Please join me in publicizing Coinbase's lack of support to hit them where it hurts - by losing customers, hurting investment, and attracting the attention of regulators. A company that holds customers' money but does not allow those customers to contact them does not deserve to be in business.
Here's a development about this problem, as of October 25.
I posted to several social media sites yesterday, including my least favorite one, reddit. For those who are unaware, reddit is a cesspool of disinformation and trolls. The reason is that their content policies promote it. They ban people who suggest that others upvote good content, and they also ban people who "doxx" other users, or refer to them by their real names. The end result, of course, is a place where anonymous trolls and outright criminals are allowed to run rampant, and anyone who tries to provide accountability to them is banned.
On reddit, I was contacted by a user who claimed to be from Coinbase support. He said that he was working on the problem and that I should call him. I called the number and everything seemed fine until he told me to go to a website (fastsupport.com) and download an executable file. He didn't have a clear answer as to why I would need to download an executable file on my computer when the issue is with Coinbase's database. I told him to send me an E-Mail from a coinbase.com address and I would call him back, and he never did.
Here is a log of the actual chat:
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cindy_coinbase_Staff 3:13 PM is there anything else we can help you with? MattAbrams 4:22 PM Thanks for replying. We're trying to get an issue resolved. An API key is returning "this account is locked, contact Coinbase.com for support." The following is the text of one of the tickets: At the end of September, we began to receive a message stating "Your account has been locked, please visit coinbase.com to resolve" when we attempted to query the Coinbase API to obtain a receive address. Nobody had made any changes to this account or to the code calling the API at the time the message began to be returned from Coinbase's servers. The method being called is "account/generate_receive_address" and no parameters are being provided. It has been called this way and worked from 2014 until September 2018. In ticket 4881645, my brother requested support on this issue and did not receive a response. Later, he called Coinbase and the support representative stated that the cause of the problem was a lack of identity verification. I successfully verified the account, but the error has persisted. I think there is a bug in your system that has caused a problem with the account because there are missing checkboxes in that account's web interface that are present in other accounts cindy_coinbase_Staff 4:24 PM confirm your email please? MattAbrams 4:25 PM email@example.com cindy_coinbase_Staff 4:28 PM your case has been assigned to the concerne department we will update you soon. stay with us thanks MattAbrams 4:29 PM ok, thanks - do you have an estimate of how long it will be? is this something that will take a few days or were you asking me to stay in the chat? cindy_coinbase_Staff 5:37 PM update, currently our concern team is reviewing the case and your old case has been closed#4881645. Your new case id# 7307362. No action is needed till further update. thanks You need to stay on chat MattAbrams 5:50 PM ok, I'll be here cindy_coinbase_Staff 6:23 PM your case is being process please contact concerning team at +1 805-308-4581 for additional info on case thanks MattAbrams 6:32 PM ok, will call shortly
But the bigger issue is that Coinbase's customer service is so unbelievably poor that it has left an opening for criminals to steal money from their customers. If Coinbase replied to its support tickets, even within two weeks, its customers would not be posting on social media sites. Even if they did complain on social media sites, it would be because the initial contact was unable to assist them for whatever reason, and they were simply criticizing Coinbase's policies. There wouldn't be any opening for criminals to pretend to be Coinbase because they would already have talked with Coinbase.
In my opinion, this is unconscionable. How can a company stand by and allow this to happen? What kind of people are running Coinbase, that they are so greedy as to be rolling out all these new coins and features while desperate customers are left to be bait for scammers?
Here's another update as of October 30 - this issue has been resolved! You can read more about the final resolution at viewtopic.php?f=11&t=5967&start=20#p22566.