Consumer complaint received 2023-10-04
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Money was not available when promised — 
Company: Coinbase, Inc. (MA)

I began trading on the Coinbase Wallet application called " Coinbase Decentralized Finance Wallet '' in XX/XX/XXXX. XXXX was purchased on the Coinbase exchange application and sent to my personal wallet within the XXXX XXXX  application. 

Over the course of several months I made trades and accumulated profits in my wallet. I made several small withdrawals to understand the process and ensure that the digital currency could be extracted when I wanted to cash out of the trading. In late XX/XX/XXXX ( XX/XX/XXXXXXXX  & XX/XX/XXXXXXXX  ) I attempted to send significant profits from the wallet to my Coinbase exchange application to send back by wire to my bank account. These transactions were denied and when I contacted customer service within the application I was told that taxes needed to be paid to the platform prior to withdrawal. I told them this was irregular as taxes would be filed and submitted to the IRS when I completed my taxes for the XXXX  calendar year. 

The taxes I was told owed were calculated at 29 % of profits and they told me the amount due would be {$23000.00}. On XX/XX/XXXXXXXX  I contacted customer service and told them I had assembled the taxes and they provided a crypto address to send payment and then funds would be ok to withdraw in full. Payment was sent to the address provided and due to the nature of virtual currency money arrived in the address higher than the amount due. Customer service told me that since the amount was not the " exact amount '' ( even though I typed the exact amount in transfer screen ) that the funds were credited to my account as a " recharge '' and that they could not return them and I would have to pay the full tax amount again to get access to funds for withdrawal. 

Obviously raising over {$23000.00} is not an easy task for a retired person so I continued to do nothing with my account while I raised the required funds. On XX/XX/XXXXXXXX  I raised the funds and again contacted customer service for the tax address. The taxes sent again exceeded the taxes due but this time they credited the overage to my wallet funds. I asked customer service if it was OK to withdraw the funds and was told YES. On XX/XX/XXXXXXXX  I attempted twice to remove funds and not transactions were denied. 

I contacted customer service on the reason for this blocking of the withdrawal and was told that because I had received funds from third party in my account it was now being flagged as money laundering account. They told me I would have to send a copy of my license and also post a margin ( aka bond ) in the amount of {$50000.00} ( to be credited as a recharge to my wallet ) and they would audit my credentials and as long as it cleared audit then the margin would be added to my wallet account and the full funds would be available for withdrawal. 

On XX/XX/XXXXXXXX  I contacted customer service and asked for the amount to be fixed so I could transfer the funds as a " recharge '' which they gave me direction to send {$51000.00} which was sent and they acknowledged receipt. I was told the audit would take 1-3 business days and to contact them before I attempt next withdrawal. 

On XX/XX/XXXXXXXX  I contacted customer service and was told the account passed the audit and no money laundering was suspected and it was OK to withdraw funds. I submitted a withdrawal request which was denied. I again contacted customer service about this latest denial and I was then told that my account " lacked sufficient credit rating to make a withdrawal and that if I wanted to improve this I needed to deposit {$75000.00} into my wallet and the funds would then be fully available to withdrawal. '' I told customer service that there was no more money and that I had loans and other outstanding obligations I had incurred because of all the other funds I was required to pay under the false pretense of allowing me to withdraw funds. I was then told by customer service that I could wait 3 months for my credit to rating to improve as time based increase in lieu of paying what essentially was a ransom payment. 

I've asked several times over the course of all this for copy of the rules and regulations they are citing but was denied access to these and they claimed they are not allowed to share with customers the rules they expect customers to follow. 

Subsequently I asked and demanded the release of my funds and was told if I didn't make monthly payment of {$15000.00} then the funds would be frozen and the account funds seized. The seized funds would then be " given to charity '' without my authorization or direction. I feel this violates the personal property laws of not only the federal government but also the state of California where Coinbase is headquartered and also Massachusetts where I reside. 

I have all the screenshots of the interactions with customer service and if required I can submit as evidence to support this case.