Coinbase complaints jump as bitcoin and crypto interest soars, study finds
As bitcoin and other digital coins grow in popularity, the number of complaints with the largest cryptocurrency exchange in the United States is also increasing, according to a new study.
According to a study by the U.S. Public Interest Research Group, Coinbase was the most criticized digital crypto wallet in the Consumer Finance Protection Bureau's complaint database, with the volume of filings accelerating - albeit at a low level - this year.
"Coinbase should investigate consumer complaints in a timely manner and hire people to answer the phone," Ed Mierzwinski, senior director of the federal consumer program at the US Public Interest Research Group, told Yahoo Money neither does it. "
From November 2019 to December 2020, Coinbase received only seven complaints about mobile wallets each year. But from that year through April, consumers filed more than five times the average each month, hitting a high of 62 in March. The surge follows the meteoric rise in the value of many digital coins.
The digital cryptocurrency Bitcoin is displayed in front of the Coinbase cryptocurrency exchange logo. (Photo: Getty)
Most of the complaints revolved around problems with managing, opening and closing individual mobile wallet accounts. According to U.S. PIRG referred 25% of Coinbase complaints that contained narratives to Bitcoin, 6% to Ethereum and 6% to Litecoin.
Read more: Bitcoin and Crypto: 14 Terms You Should Know
PIRG found that many of the complaints allege problems trying to get money from the service. For example, one person who eventually received financial relief wrote that “Coinbase is putting my bitcoin in a 'vault' that I cannot access.” Another consumer made a similar complaint, saying, “I tried my coins pull 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 for withdrawing funds. You can add money to your vault by sharing your vault address or transferring from your wallet to your vault.
Cryptocurrency vaults offer additional security measures to keep your funds safe. (Photo: Getty)
Coinbase itself said it was stepping up its customer support when it was contacted by Yahoo Money regarding the study.
"In the past few months we have quadrupled our capacity on our support team and deployed new technologies and methods to solve our customers' most pressing problems faster," said a Coinbase spokesman.
Coinbase isn't alone with complaints about cryptocurrencies. Other buy and sell platforms saw complaints like EToro (31), Kraken (19), Robinhood (107), Binance.us (69) and Gemini (68) as investors plunged into the hot crypto market.
"Everyone thinks that if they buy crypto today, it will be worth twice as much tomorrow and four times as much the next day," said Mierzwinski. "I think the average consumer shouldn't be in cryptocurrency."
Marissa is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @MarissaLGamache.
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