Consumer complaint received 2024-09-27
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Unexpected or other fees — 
Company: Coinbase, Inc. (FL)

Subject : Complaint Regarding Coinbases Withdrawal and Deposit Fees and Lack of Direct Transfers Dear Sir/Madam, I am filing this complaint against Coinbase XXXX XXXX XXXX XXXX cryptocurrency company, for their unfair practices regarding withdrawals and deposits following the sale of cryptocurrency. I believe these practices may violate consumer protection laws, and I would like to request an investigation into the matter. 

Summary of Issue : Coinbase has made it unnecessarily complicated and costly for users to withdraw funds from their platform after selling cryptocurrency. Instead of providing a direct transfer of funds from Coinbase to users bank accounts or services such as XXXX, they require a two-step process that incurs multiple fees. This process raises concerns about transparency, fairness, and compliance with consumer protection standards. 

Detailed Description of the Problem : XXXX. XXXX XXXX XXXX Coinbase XXXX account After Selling XXXX : When a user sells cryptocurrency on Coinbase, instead of allowing a direct transfer of the proceeds to a bank account or XXXX, Coinbase forces users to deposit the money into their internal account within the app. 
This account is part of XXXX platform, and any funds in it are effectively held within the companys ecosystem, preventing the user from having immediate access to their money. 
XXXX. Unnecessary XXXX Fees : Coinbase charges users a fee for depositing the proceeds from a cryptocurrency sale into their internal account. This deposit fee appears unnecessary, as the funds are not leaving the Coinbase ecosystem and are only being transferred internally. 
XXXX. XXXX XXXX to Bank Account : After a user deposits money into their internal Coinbase account, they are then required to initiate a second transaction to withdraw the funds to their bank account or XXXX. 
Coinbase charges an additional fee for this withdrawal, meaning that users are charged twice : once for the forced deposit into the internal account and again for the transfer to their external bank account or XXXX. 
This process and its fees result in users paying a significant portion of their funds simply to access their money. 
XXXX. Lack of Direct Transfer Options : Unlike traditional financial institutions and other cryptocurrency exchanges, Coinbase does not offer a direct transfer option for the proceeds of a sale to be deposited directly into the users bank account or XXXX. 
Most users expect that after selling their cryptocurrency, they should be able to transfer their money directly to their preferred financial institution without unnecessary intermediary steps or fees. 
XXXX current system forces users to keep their money within their platform, which can be seen as an anti-competitive and customer-unfriendly practice. 

Impact on XXXX : These practices have a negative impact on consumers in several ways : XXXX. Increased Costs : Users are being charged multiple fees simply to access their own funds after selling cryptocurrency. This is not only frustrating but unfair, as it places a financial burden on consumers who may already be dealing with volatility in the cryptocurrency market. 
XXXX. Lack of Transparency : XXXX fee structure is not clearly communicated to users upfront, leading to surprise fees during what should be a straightforward process of withdrawing funds. 
Users may not realize that they will be charged both for depositing funds into their internal account and for withdrawing funds to their bank account, resulting in frustration and financial loss. 
XXXX. Delayed XXXX to Funds : The forced deposit process delays users access to their money, especially if they are unfamiliar with how to navigate the Coinbase platforms two-step process. 
In many cases, users expect immediate access to their funds after a sale, which is standard practice in other financial services. XXXX current withdrawal system adds unnecessary delays. 

Requested Actions : I request that your agencies investigate XXXX practices and consider the following actions : XXXX. Implement Direct Transfers : Coinbase should be required to offer a direct transfer option where users can send the proceeds from a cryptocurrency sale directly to their bank account or XXXX without first forcing a deposit into an internal Coinbase account. 
This practice should be standard across the platform to ensure fairness and transparency. 
XXXX. Eliminate Double Fees : Coinbase should eliminate unnecessary fees for deposits into internal accounts, especially when the funds are being transferred to the users bank account shortly thereafter. If Coinbase charges a withdrawal fee, this should be the only fee applied. 
Users should not be charged multiple times to access their funds, and fees should be clearly disclosed upfront. 
XXXX. Improve Fee Transparency : Coinbase should be required to improve transparency regarding fees. Users should be made fully aware of any costs associated with selling cryptocurrency, depositing funds, and withdrawing money before they initiate a transaction. 
Fee structures should be communicated in plain language and should not be subject to hidden charges. 
XXXX. Refund Unjust Fees : Coinbase should review its past transactions and consider refunding any fees that were unfairly or unnecessarily charged to users who were forced to deposit funds into an internal account and then pay additional withdrawal fees. 

Conclusion : XXXX current withdrawal process is unnecessarily complex and costly, placing an undue burden on consumers. I urge your agencies to investigate this matter and take action to protect consumers from these unfair practices. Coinbase should be held accountable for its lack of transparency and the imposition of double fees on customers. 

Thank you for your attention to this matter. I look forward to your response and any steps you XXXX take to address this issue. 

Sincerely,