Consumer complaint received 2024-07-16
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Fraud or scam — 
Company: Coinbase, Inc. (WV)

Dear Sir/Madam ; I fell victim to the fraudsters who identified themselves as a legitimate brokerage company, " XXXX XXXX. '' It started in XX/XX/XXXX, when the company provided me with the scammers wallet address, and I transferred to the Coinbase wallet a total of {$810000.00}. When I tried to withdraw, the requests were closed. 

I report this to you as a regulator of Coinbase because the fraudsters do not have any regulators. Therefore, as a regulated organization, Coinbase could prevent fraud by running a comprehensive identity verification process that can detect fake addresses and dates of birth using a database offered by data collection agencies. By using these agencies, Coinbase could verify a persons identity and also keep personal user information secure. However, on this occasion, Coinbase did not prevent fraud regarding my case, and my money was stolen by an unregulated fraudulent company. 

Scam Description On XX/XX/XXXX, I received a message on XXXX from XXXX XXXX, which led to a casual friendship over the next three weeks. We primarily communicated via XXXX, sharing photos and details about our interests, families, and lifestyles. XXXX, who also referred to herself as XXXX XXXX, claimed to live in the upscale XXXX XXXX neighborhood in XXXX XXXX. She showed a keen interest in my career as a XXXX, my hobbies, family life, and home. Trusting her sincerity, I reciprocated. 

XXXX mentioned she had an influential uncle in XXXX who was an expert in market research and advised her on investments. In early XXXX, she shared a screenshot showing significant profits from trading international gold futures. Intrigued, I asked if I could pursue similar trading opportunities. XXXX introduced me to the XXXX trading platform XXXX XXXX and provided what appeared to be a certificate from the US Department of the Treasury XXXX seemingly legitimizing the platform. Naively, I did not thoroughly scrutinize or question the platform 's authenticity. 

To facilitate fund transfers, XXXX instructed me to create accounts with XXXX and Coinbase. Once linked to my bank account, I initiated fund transfers. XXXX emphasized using cryptocurrencies to minimize bank fees and tax liabilities upon withdrawal. 

Initially investing XXXX XXXX, I made my first trade under XXXX 's guidance on XX/XX/XXXX. Following her instructions to purchase shares during specific trading nodes, my account grew to XXXX XXXX upon selling the shares on the same day. Encouraged by the profit, I withdrew the funds from XXXX XXXX to my bank account. However, subsequent withdrawal attempts were unsuccessful. 
Convinced of the venture 's legitimacy, I injected more funds into my account over time, including liquidating a portion of my IRA balance. XXXX further bolstered my trust by adding an additional XXXX USDT to my account on XX/XX/XXXX. Following her guidance, I exclusively traded during the designated nodes, resulting in my XXXX XXXX account reaching XXXX XXXX by XX/XX/XXXX. 

However, my attempts to withdraw funds on XX/XX/XXXX, were blocked by a demand for a " XXXX XXXX XXXX '' of XXXX XXXX. Subsequently, a " Personal Income Tax '' fee of XXXX XXXX was requested, followed by a " Risk Fee '' of XXXX XXXX on XX/XX/XXXX. It was then that I realized I had fallen victim to a fraudulent scheme, losing approximately {$800000.00} of my hard earned money. 

Coinbase Negligence The necessity of adhering to XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX regulations is evident in my experience, where scammers exploited Coinbase 's wallet. Compliance with these rules is essential to protect users from fraudulent activities in the cryptocurrency industry. 

Cryptocurrency companies must comply with regulatory bodies such as CFPB, XXXX and state-specific regulations to ensure legitimacy and user security. Robust compliance frameworks are crucial to shield users from harm and maintain industry integrity. 

Consumer protection laws play a vital role in ensuring fairness and transparency. Failure to uphold these laws exposes users to deceptive practices and financial losses. Therefore, strict adherence to consumer protection regulations is necessary for user trust and safety. 

Legal liability is a significant concern for cryptocurrency companies. Neglecting to detect and prevent fraudulent activities can lead to legal consequences and harm users. Proactive security measures are essential to mitigate legal risks and protect users from financial harm. Compliance with legal obligations is not just a legal requirement but also a moral obligation to safeguard users ' safety and security. 

I want to bring to your attention that I have encountered significant challenges with Coinbase, as they have shown an unwillingness to assist me in recovering my funds. At the time, I was unaware of the importance of the XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX  policies. It is imperative for Coinbase, as a financial institution, to conduct its business lawfully and ethically, with a responsibility towards both customers and regulatory authorities. 

Moreover, I believe that by facilitating the transfer of my hard-earned funds, Coinbase indirectly allowed this fraudulent activity to take place. As an ordinary citizen with no prior knowledge of financial regulations or experience in the field, I was not informed about the obligations of financial entities to adhere to XXXX XXXX XXXX XXXX  This unfortunate incident has compelled me to thoroughly understand the fundamental principles of these policies that every exchange platform should have diligently implemented. 

It is incumbent upon Coinbase, as a regulated entity, to address the fact that my attempts to communicate my concerns were met with refusal. The primary purpose of regulatory bodies is to arbitrate disputes between clients and financial institutions. Despite my efforts to resolve the issue directly with Coinbase and formally request the return of my funds, citing their failure to safeguard me and their violation of terms and conditions regarding customer protection against money laundering and fraud, I have not received a satisfactory response. 

After exhausting all attempts, I was disheartened by Coinbase 's dismissive handling of my issue, especially given their supposed commitment to customer protection. Their immature and underestimating response left me disappointed and desperate for justice. Despite my expectations, they showed no willingness to listen or defend my case, leaving me feeling disregarded and disrespected. It seems Coinbase, a regulated entity, allowed a fraudulent company to access my funds, further exacerbating my frustration and disappointment. 

I would also like to inform you that I have already contacted the police, and an officer is actively pursuing my case. It was discovered that my funds were transferred to a XXXX bank. I have contacted you before regarding XXXX XXXX ( Complaint ID XXXX ). 

Please take this into account and use the information from my previous appeal when opening a new case. 

DESIRED OUTCOME : I kindly request that you contact Coinbase regarding my situation and resolve this dispute through the right process. 
I demand Coinbase to reimburse me for the sum lost of {$810000.00}, as I have fully been released of liability. 
I ask Coinbase to maintain a high quality of customer care and service and act to improve the support chat and team, as well as deal with the relevant individuals who did not do their job appropriately. 
I request the Consumer Financial Protection Bureau to assist me, as it could be clearly seen that Coinbase has no willingness to handle my complaint. 

Please let me know if there is anything else that I can provide you with. Im sincerely looking forward to receiving an official response via email. 

Yours sincerely, XXXX XXXX