Consumer complaint received 2022-04-12
Company: Coinbase, Inc.
State: TX
Product: Money transfer, virtual currency, or money service
Sub-product: Virtual currency
Issue: Fraud or scam

Complaint:
A hacker accessed my Coinbase account on XX/XX/XXXX. My complaint is in regards to Coinbase, which I believe is partly responsible for the original theft and for making the entire situation a XXXX times worse. I am XXXX XXXX XXXX and the amount of run around Coinbase has given me with their supposed customer service line has created as much stress as the original theft. 

For context, let me first explain that Coinbase sent a series of emails to me as the hacking was occurring. Most of these were transaction confirmations, although two of the transactions were delayed because of what Coinbase called a security precaution. Unfortunately, I did not see any of these emails until a few hours after the hack and despite recognizing the need for security precautions, Coinbase allowed over XXXX fraudulent transactions to go through. As soon as I realized that my account was hacked, I followed the instructions on the Coinbase support page and locked my account. Since this time I have not been able to unlock the account to see what damage has been done. After numerous phone calls and hours spent talking to different representatives, no one at Coinbase has been able to assist me. I have gone through the process of verifying my ID to access my account XXXX times and received numerous emails instructing me to go through the process again, yet my account is still locked. Finally, I received an email from Coinbase telling me to just create a new account and they will transfer the balance. As I have not been able to access the account I do not even know what the balance is. I am supposed to take it on faith that Coinbase will transfer the correct amount. I do not see this as an acceptable option. Coinbase already allowed the hacker to complete purchases worth {$5000.00} under my account and because my bank prevented the hacker from pulling the {$5000.00} cash from my checking account to my Coinbase account, Coinbase has told me that it has extracted the deficit from whatever balance was left on my account. In other words, the hacker took my money and now Coinbase has also taken my money because my bank did its job and prevented the hacker from stealing from me. I have estimated losses of around {$30000.00} based on the confirmation emails sent at the time of the hacking. 

The major pain points that justify reparations : XXXX. Failure of Coinbase to stop the transactions when flags were clearly raised : - Coinbase actually sent me emails acknowledging potentially fraudulent activity. XXXX of the fraudulent transactions were flagged as suspicious. For some reason these transactions were delayed even though many more that were made immediately before and after them were allowed to proceed without question. ( Screenshots of the emails Coinbase sent at the time of the hack are attached in a pdf. The emails regarding the delayed transactions are attached separately for easy access. ) -I was visiting my daughter out of town at the time the hacking occurred. Even though I had been logging into my account for a couple of weeks while I was out of town, I never got any notification about logging in on a new device or from a different location. When the hacker stole my money I never got this notification either. Only after I locked the account and was attempting to get back in did I suddenly get an email warning me of a log in attempt at a new device or location. Coinbase only appears to care about security measures when the goal is keeping me out of my own account. There were no such measures taken when the hacker was stealing my money.

2. Additional theft of {$5000.00} perpetrated by Coinbase itself : -Days after the initial hack, I received an email ( screenshots attached ) from Coinbase saying that I purchased {$5000.00} worth of new crypto without first adding funds from my checking account. This purchase was clearly attempted by the hacker and because my bank has proper security protocols, the hacker was unable to move the funds. Coinbase informed me that the {$5000.00} deficit would be taken from whatever balance was left on my Coinbase account. 
-This email came days after the initial theft, after I had locked my account, and after many calls to customer service reps. As mentioned, Coinbase was aware that something was suspicious, yet it permitted all these fraudulent transactions, including this one which appears to have been made with funds that I did not actually have available to spend. Instead of blocking the transaction, Coinbase allowed it and is now taking the money from me. This should also be considered theft. ( Screenshots of all relevant emails are attached in a pdf ) 3. Coinbase hindering my ability to act quickly, locking me out of my account and preventing a timely report to law enforcement.

-I began the process to regain access to my account ASAP. This included uploading my driver 's license and a selfie through a special Coinbase portal. I was told the account would unlock within XXXX hours but when the time came, my ID verification was canceled. Since then I have received a number of emails ( mostly automated ) asking me to go through the process again. I still do not have access to my account. ( Screenshots of all relevant emails are compiled and attached in a pdf. ) -I attempted the ID verification process three times. The second time, the process I was told to follow was slightly different, but because the instructions came from help @ coinbase.com -- a verified email addressI obliged, sending my ID photos, with a photo of me holding a handwritten note as per the instructions. I had to upload these photos through a different portal than before. It was suspicious. The whole time I wondered if somehow I was giving my information to the hacker, but the customer service reps on the phone confirmed that the instructions were in fact from Coinbase. The effort did not result in access to my account. The added stress of wondering whether this was a scam made this entire experience worse, but I felt that I had no choice but to comply in order to access my account. 
-Besides hindering police reporting, the lack of account access may have also cost me money. The two delayed transactions, noted above, required me to stop the transaction within 72 hours or else Coinbase would allow them to go through. I had to log into my account to do this and despite many frantic calls and emails I was not able to log in and still do not know whether the transactions were processed. Similarly, the email in which Coinbase itself threatened to take {$5000.00} from me also gave a 5 day window of response. Again, I had to take action by signing into my account and all my attempts to call and email Coinbase were fruitless. I got an email confirming that Coinbase had taken the funds. ( Screenshots of relevant emails are attached. ) -In short, as a result of being unable to access my account, I can not know for sure what was taken, I can not get the real transaction records to send to the authorities, I spent time trying to follow up with Coinbase that law enforcement could have taken advantage of to track the hacker, and I lost additional money. I never imagined that the time spent following up with Coinbase would drag out as long as it did and come to no fruition.

4. Coinbase is now suggesting that I close my account, open a new one, and trust them to transfer the correct balance. 
-Since I have not been able to see my account since before the hacking occurred, I was never able to see the balance with my own eyes. I have only estimated my loss based on the emails noting various transaction amounts. For all I know, the hacker could be within Coinbase itself. Coinbase has already taken an additional {$5000.00} from me, how can I trust that the transferred balance will be honest? 

Note : Most of my communication was by phone or through the online email box on the Coinbase help page. As a result I only have limited documentation of the communication from my end. I did compile the messages I sent as replies to the Coinbase emails and those are attached in a pdf as well.

Company response to consumer: Closed with explanation