Consumer complaint received 2023-05-26
Company: Coinbase, Inc.
State: CA
Product: Money transfer, virtual currency, or money service
Sub-product: International money transfer
Issue: Money was not available when promised

Complaint:
Attached please find the dates and the address of my wallet account. 
In addition to the wire transfer 's I made to this fraudulent company. 
I am writing this letter to ask you to help me to release the funds that are in Coinbse. This Coinbase company is not the regular Coinbase, they state that they are a " decentralized financial liquidity mining project under Coinbase ''. They have not given me a contact number, I have not spoke to anyone, I only speak through them via chat through the following link : XXXX XXXX XXXX XXXX & XXXX 

I also do not know their address, they say they are in XXXX XXXX and they do not have headquarters. 


On XX/XX/2022 I opened an account with Coinbase and used Coinbase Wallet. Someone on XXXX was chatting with me and introduced me to this company which I dont know their address and cant speak to anyone. I only believed this person as I was just recovering from XXXX XXXX XXXX. I started my investment by {$15000.00} and I increased my investment to {$300000.00} after I earned a good profit from my initial investment. By XX/XX/2022, I earned {$110000.00} profit. On XX/XX/2022, I wanted to withdraw the principal and profit I made, however, Coinbase asked for capital verification by asking me to transfer {$320000.00} to Coinbase before Coinbase release my principal and profit. Therefore, for purpose of capital verification I transferred the said fund from my personal account ( ending XXXX ) whereas I was using my fathers account ( ending XXXX ) prior to this transaction to transfer fund to Coinbase to make my investment. However, this cause a problem for my for purpose of capital verification because the fund for this purpose had to be transferred for the same account that I was transferring the money for investment. This required me to transfer additional {$270000.00} from my fathers account after I had already transferred {$320000.00} from my own account for the purpose of capital verification. Unfortunately, by the time Coinbase tried to send my money back ( i.e my principial and profit ), my father removed my name from his account and Coinbase could not transfer the fund since my name was not on my fathers account which Coinbase wanted to transfer the funds to. 

To resolve this issue, I opened another bank account under my own name. In order for Coinbase to transfer my funds to this account, Coinbase again asked me to provide another capital verification for the amount of {$75000.00} which I did. Unfortunately, when Coinbase allegedly transferred the fund to my account, the bank returned the fund because the source of fund was not clear and the amount of fund was being wired was more than the income I declared as my income to the bank. I provided my documents that showed I borrowed the money against my condominium for purpose of capital verification which that resolved the issue of how I was able to accumulate such amount for purpose of verification. Then, for the first time, Coinbase staff told me that my account is subject to XXXX XXXX tax withholding and asked me to transfer additional {$260000.00} for tax liability on the profit I made before Coinbase can release my total fund ( i.e {>= $1,000,000} ). 
They requested {$100000.00} to be send to them in order to get the money back. I did not send them the money as I do not trust them and I am short of money as i keep having to pay for the loan on a monthly basis. 
Moreover, assuming that the total fund ( i.e {>= $1,000,000} ) was returned to the Coinbase after receiving bank rejected the fund because of above issues and as of now Coinbase has the custody of the fund, Coinbase can deduct the amount I is liable for the taxes from my total earning subject to tax and release the remaining balance of my earning to myself. This is exactly what 26 U.S. Code 1441 ( C ) ( 5 ) requires.

See, 26 U.S. Code 1441 ( C ) ( 5 ) In the case of gains described in section 631 ( b ) or ( c ), and gains subject to tax under section 871 ( a ) ( 1 ) ( D ), the amount required to be deducted and withheld shall, if the amount of such gain is not known to the withholding agent, be such amount, not exceeding 30 percent of the amount payable, as may be necessary to assure that the tax deducted and withheld shall not be less than 30 percent of such gain. ( Bold added ) Please also note that the code expressly stated that the amount of tax withholding shall be deducted from gross amount of gains subject to tax under section 871 ( a ) ( 1 ) ( D ). This means that 1 ) Coinbase can not ask for additional fund for purpose of tax withholding and 2 ) the amount of my tax withholding shall be calculated based on my total gains subject to tax under section 871 ( a ) ( 1 ) ( D ) and not total amount that is being withheld by Coinbase. 

As of now, {>= $1,000,000} is being held by Coinbase in my account. They first asked me to transfer additional {$260000.00} ( 20 % of {>= $1,000,000} ) for purpose of tax withholding. 
I messaged them them that I dont have the money, and after a few days they said that they spoke to the Federal Finance department they said I need to send them {$99000.00} for the funds to be released and thereafter they will send me the money back and I can pay taxes with that money. Coinbase states that they talk to the Federal Treasury yet I do not believe this. They state the Federal Treasury has my money and that they entrust Coinbase so for that reason I need to send Coinbase the money and they will release my funds. Yet, I dont believe this.

Now the customer services does not even chat with me and they have closed the account. They have stole all of the money i wire transferred to them.

Company response to consumer: Closed with explanation