How exchanges are saying "Merry Christmas," part 2

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Steve Sokolowski
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Joined: Wed Aug 27, 2014 3:27 pm
Location: State College, PA

How exchanges are saying "Merry Christmas," part 2

Post by Steve Sokolowski » Tue Dec 24, 2019 11:45 am

Two Christmas Eves ago, I drew attention to several exchanges' business practices (viewtopic.php?f=11&t=2924.) C-Cex simply stopped processing withdrawals for a month, and Poloniex caused us to lose $200,000 due to their delays. C-Cex closed up shop shortly thereafter, and Poloniex is also effectively out of business (I'm not sure what else one can call abandoning the world's largest market.) The fate of these exchanges should have been a warning about what happens when a corporation provides poor customer service, but it seems that today's exchanges have yet to learn from their predecessors.

This year, the first up is Bittrex, which owes us about $15,100. About ten days ago, Chris exchanged about 78 BCH to dollars to pay taxes, and initiated a wire transfer to the company's Wells Fargo account. While we have moved almost all of our operations to cryptocurrency payments, the government still only accepts tax payments through the legacy system. We had used Bittrex multiple times in the past to pay taxes with no problems. Not only had we used Bittrex for coin sales for a while, but we had made multiple transfers to the same account that had no issues and appeared the next day.

This time, we got an E-Mail from our financial advisor on December 16 stating that a wire transfer had been sent but it was unable to be credited, either because it went to the wrong account or because no account was specified. We replied to indicate that it was our transfer, but by the time the issue was brought to our attention, the funds were automatically returned after a 3 day waiting period. That's when we submitted a support ticket to Bittrex and received a canned reply stating that the issue was being reviewed. After four (!) more days, we received a second canned reply that was completely irrelevant, almost as if someone had clicked a button without reading the ticket. When Chris replied that their reply was nonsense, he got another reply stating that a "wire specialist" was looking at the issue.

Meanwhile, the IRS and the Pennsylvania Department of Revenue assessed interest on the back taxes, and issued a bounced check fee. I don't think it's unreasonable to expect that money will take less than ten days to clear into an account, so we intend to ask Bittrex to cover the interest they caused to accrue due to their poor customer service. But all talk of covering the interest is premature if they don't actually reply to the ticket, and they have yet to do so.

Next up is Coinbase, which has the worst customer service of any company in the world. Earlier, I posted about how it took 40 days to get an issue resolved (viewtopic.php?f=11&t=5967), and how before then they had never actually replied to any ticket I had ever sent them. Since then, the Internet has been plastered with negative reviews - take a look at https://www.trustpilot.com/review/coinbase.com, where Coinbase has an unbelievably poor 1.6/5 rating.

Now, the 40 day delay looks like prompt service, as we've had another ticket outstanding for 57 days and counting. Just as last time, there is another "OAuth application has been disabled" error, and hundreds of our customers had their money stranded. This is a major problem for them, because most of these miners are customers who earn less than $5/day, and the bitcoin transaction fees are unreasonable. These miners want to be paid in bitcoins, and because we don't have a money transmission license, we have had to refuse requests to convert these bitcoins to litecoins after they were earned. The only way for these customers to be paid is for money to be sent from Coinbase account to Coinbase account.

We responded to Coinbase's lack of support by submitting multiple additional tickets, each of which received a canned response stating that it was being directed to a "specialist." Finally, we posted messages in the affected customers' accounts stating that Coinbase was responsible for the problem, listing the ticket number in Coinbase's system, and telling them to submit support tickets to Coinbase about it. How did Coinbase respond? By telling them that a specialist was working on the problem.

It is true that there is a severe labor shortage in the economy right now, but customer service is such an easy and cheap way to attract customers that I continue to be dumbfounded why Bittrex and Coinbase spend money on expensive marketing and R&D, and then lose hundreds of customers to other exchanges because they can't reply to support tickets within a reasonable time, which I consider to be 3 days. A software developer earns $50/hr, and a support representative can probably be paid $15/hr. It's a no-brainer to hire three customer service reps in place of one developer to keep customers happy.

Kraken has done just that. Within minutes of my complaining publicly about Bittrex, one of their agents contacted me and provided a link to set up a corporate account. Solely because Kraken has good customer service, I'm going to spend some time tomorrow researching whether they allow free account-to-account transfers. If they do, we'll not only sell our mined blocks through them, but will also switch from Coinbase to Kraken for small payouts to customers.

Poor customer service always catches up to companies, and Bittrex and Coinbase are no different than anyone else. I suspect that the deluge of negative experiences online has hurt Coinbase's business and that harm was responsible for their need to increase fees earlier this year. As I said in 2017, and as I'll repeat now, the holidays are not an excuse for companies to hold customers' money. We're going to escalate Bittrex to further action if they don't resolve the issue by the end of the week, and I would warn potential users of Bittrex to hold off on trading there for now.

Unlike C-Cex, Bittrex and Coinbase appear to be perfectly legitimate and solvent. Nevertheless, if you can't contact an exchange's support, your money is still just as gone as if the exchange went belly up, for weeks or months at a time. Sometimes, like we did at Poloniex, and as we are doing at Bittrex, you lose large amounts of money due to downstream effects like price volatility, bank charges, and interest. Stay away from these exchanges until they start replying to their tickets.
cc4506
Posts: 53
Joined: Wed Mar 28, 2018 10:07 am

Re: How exchanges are saying "Merry Christmas," part 2

Post by cc4506 » Tue Dec 24, 2019 2:20 pm

I am more than fine with Kraken so if works I have no problem switching over.

Chris
johnWorthley
Posts: 2
Joined: Sat Jun 04, 2016 9:47 am

Re: How exchanges are saying "Merry Christmas," part 2

Post by johnWorthley » Thu Dec 26, 2019 2:05 am

Customer service on crypto exchanges are like restrooms. You never know if you are going to get a 5-star Japanese bidet or a rave porty potty with a long line. If Coinbase is Coachella PP's, then Kraken is Naruhito's palace bidet.

I had a 8-email volley with Kraken within an hour (<1min response time) last week. Kieren, who is actually one of the exchange dev veterans, helped me and this induced high value information flow followed by my rare customer satisfaction. In the Land of Oz, you don't want to be navigating with scarecrow or lion but with Oz himself. They seem to match more experienced devs with higher volume customers for customer support as it should be.

I learned they are also thinking about implementing sweeps which will redirect transactions such as BTC mistakenly sent to Kraken USDT addresses to the appropriate customer-designated addresses for customers who sent crypto to the wrong address. Banks will never provide this level of service to reroute wires after they were sent. I will replace all my banking services with Kraken if they can handle bill pay and lending.

In the future, Kraken can set up a condition based monitoring (CBM) for determining the live status on their services such as the trading engine, Etana custody wire-service, etc to predict near-future customer service complaints. Predicting customer support demand can onramp customer service support as demand increases through a Zendesk plugin. A gig-economy solution for matching power users to customer complaints. More experienced customers helping out Kraken neophytes. Sharks pairing with minnows. Many customer service complaints are simple questions that can be more appropriately answered by another verified more experienced user motivated by pure joy from being a Kraken customer than an exchange dev focused on engineering+product dev.

Other exchanges' customer service reps are so far misinformed from the exchange decision making that they are utterly useless. It is this level of proactivity by kraken's devs that keeps them from ever being hacked. Their worldclass near-instant $5 wire transfer service (faster than Gemini) is pretty good too.
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