Hey guys, this is a cautionary tale about Coinbase where I will explain what an amazing platform they are.
So almost 2 weeks ago, when I logged into my Coinbase account, I saw that it was frozen (basically I couldn’t buy any crypto with it) until I repaid money that I owed to Coinbase as a result of an unsuccessful transaction with my bank, US Bank.
However, I couldn’t deposit any money in my account. I started thinking to myself “OK, so they want me to pay what I owe them, but I cannot deposit any money?”. I was obviously confused. It was like owing money to the bank, wanting to pay them, but them refusing to take your money. Even stranger than that was that the only other option I had left was to sell my crypto and Coinbase put a nice banner image pretty much saying “if you don’t pay your balance, we’ll sell your crypto for the amount that you owe us to pay for that”.
So now imagine that same example with the bank – you owe them some money, you want to repay them, but they say NO to repaying with money and they say they only accept GOLD. You can only pay with gold and nothing else works…
Obviously, I was super confused, that didn’t make sense to me so I wrote a support ticket to Coinbase hoping to get in touch with someone from their amazing customer support team who are true geniuses when it comes to solving customer issues. I mean after all they’re a publicly traded company and one of the biggest cryptocurrency exchanges in the world, so they have no other option, but lead as an example, especially in that regard.
So what happened is that a member of their team reached out to me just a few hours later (good!), wrote me a response which was a bit generic in nature and left me wondering even more:
***Per the terms of the User Agreement, you are responsible for the negative balance in your Coinbase account.***
***You will be directed to a yellow banner that lets you know a transaction was reversed and a button to “Make Payment” (if you don’t see this banner, please let us know). Selecting “Make Payment” will allow you to choose one of your payment methods from a drop-down menu.***
***Due to restrictions placed by most card issuers, debit cards cannot be used to resolve a negative balance on a Coinbase account.***
As you can see from this wonderful response, they said that I am responsible for paying for the negative balance (aka what I owe them), but I cannot pay with a debit card. The funny thing is that I couldn’t pay with fiat currency USD at all, not with credit card, not with ACH transfer – nada. I also screenshotted it so I have proof of that.
Literally, when I was prompted to click on that wonderful “Make Payment” button, do you know what the only options were? I could ONLY pay with whatever was inside my coinbase account which was only crypto. My USD balance was fewer than $10, not enough for anything, and they didn’t allow me to deposit any new money. So selling my crypto was the only option. **Please keep that in mind because we will get back to that later.**
So I responded that I don’t have any option to pay with cash which doesn’t make sense because I have the money to pay. I even told them if they want to just send me a bank account so I can send the money I owed directly to the company so they can unfreeze my account and cover the amount I owed.
I knew where things were heading… they wanted me to pay with crypto DURING A MARKET DOWNTURN. I mean, in reality, that was literally the only option on the table.
Yes, the market was way down especially for the cryptocurrencies I owned (they were 40-50% down) so I mentioned the following:
***But the crypto market is down – the value of my crypto is so much lower than it was before. I’ve been holding and now you will be selling my crypto at a loss.*** ***Not being able to pay with US dollars when I have them doesn’t make sense to me… I can’t believe that you will forcefully sell a user undervalued crypto at a loss for the user.***
Do you know what was their response was to this valid criticism?- IGNORE
Yes, they literally ignored me for 9 days straight <3
So I knew something was going on because our conversation went like this:Email #1: Support ticket. Email #2: Their response (one the same day)Email #3: My response (on the same day) – this is where I shared my option why they’re totally at fault. Email #4: Their response (on the same day) – told me someone will get in touch with me to resolve the problem. Email #5: Their response (after 9 days) – after I sent them 4 consecutive emails and wrote a whole post on reddit…
In the 4th email they said this:
***We’ve transferred your case to a specialist who will be able to further help you with this issue.***
So I was definitely happy that the help was on the way – the “specialist” was coming to help me.I was waiting for the messiah, he was on the way and I really hoped finally for some resolution.Of course, they came back to me in a timely manner, just 9 days later, with a truly remarkable response.
I mean if there is such a thing as the perfect customer support, this is it.
They said many “true” things, but the most interesting was the following:
*When repaying an owed balance, you have three options: Sell existing crypto in your wallet, deposit digital currency from an external wallet to pay for the balance amount, or* ***remit repayment via your bank account through the “make payment” option in your account****. Since none of these options were exercised within the 5 day timeframe you were given, Coinbase reclaimed your funds on site to pay for the owed balance.*
So as you can see I had not just one but 3 OPTIONS. Option 1: sell crypto Option 2: deposit crypto from external wallet and Option 3: click “make payment” and deposit money from your bank account
In reality ONLY option 1 worked – I could only make payment with my cryptocurrencies INSIDE of my Coinbase. And the crypto market was way down, my own crypto was down 48% so was I supposed to just take the loss and accept that I was wrong all along?
Well, do you remember from earlier they said “Hey you cannot use debit card to repay this”. I also added that I couldn’t deposit ANY NEW MONEY regardless of what payment method. However, here their 5 star support team says “You have 3 options. One of these options is to simply repay this balance via your bank account”….NOT TRUE. In this email they were straight up LYING. I even have screenshot that I could only “Make Payment” with the cryptocurrency already in my Coinbase account, I couldn’t do anything external like depositing cash to pay.
So for the rest of this email they kept insisting that things which weren’t true were true and that they cannot do anything.
So of course I tried again to reach this wonderful team of real PROBLEM SOLVERS, pointing out that their platform was either broken or they were lying to my face and that I need someone to actually help me.
Keep in mind, we keep going back and forth in around 10 emails, never did they offer to talk to someone on the phone. They told me a bunch of BS, promised me that help was on the way, yet they did absolutely nothing and TODAY they OFFICIALLY closed the case <3
Now I have lost 48% of my money that was invested in crypto thanks to Coinbase – the platform and their customer support team. Their platform didn’t allow me to pay in the time period I had and now they punished me, refusing to return my crypto (the exact # of coins they took) and let me pay what I owed them with USD.
So yeah guys, **if you ever have to rely on Coinbase to solve an issue that you have, especially an issue that they’ve caused, you better forget it. Expect them to close the case because you don’t deserve anything. After all, who are you? Just some regular person who is trying to invest your hard earned money in crypto – to them you’re literally nobody. It’s their platform, their rules.**
**Their 5 star team are not responsible, in any way, for providing a solution to your problem. If their platform doesn’t allow you to pay what you owe them in USD but only with crypto during a market downturn, it’s on you – you should’ve read their Terms of Service which apparently says that if the PLATFORM SCREWS UP, you have to accept it. Also, if they make you wait 9 days for a generic response, again, DO NOT complain – they do not owe you anything. If they close the case on you even though it’s obvious they haven’t solved your problem and just wasted your time! It’s their platform, their rules.**
**Just like the “great” politicians we have, Coinbase has a lot of power and money, but they forget where all of that came from. The user is not important. Heck, you don’t even deserve a phone number to call or if you disagree with them you must be happy when they close the case on you.**