Consumer complaint received 2022-02-25
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Fraud or scam — 
Company: Coinbase, Inc. (OR)

XX/XX/2022 XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Or, XXXX ( XXXX ) - XXXX To whom it may concern, This is to complain against the Coinbase. Company Name : Coinbase, To whom it may concern, My name is XXXX XXXX I have been a customers of Coinbase for about a year and I have been using your services and learning as I go things where going well. I have made several transactions in Buy/Sell of Currencies like, Bitcoin, but sill just learning. 

( Coinbase ). URGENCY : HIGH IMPORTANCE : HIGH [ WITHOUT PREJUDICE ] I wish to practice my right as a customer of Coinbase to use your organization 's service, seeking a formal, impartial investigation to amicably settle my dispute with Coinbase. In order to clear up or state my case respecting my complaint, I believe it will substantially strengthen both my case and your understanding, by taking a deeper look at the happenings of my case, and analyzing the relevant facts in an objective and comprehensive fashion. 
It is, crucial to note that I have been manipulated, socially-engineered and coerced to engage these fraudulent criminals. Much to my embarrassment, I recognize that I am the victim of an investment scam. My complaint to the CFPB has arisen as I do not consider, by any stretch of the imagination, the conduct of Coinbase to be commensurate with their legal role and responsibility to their customers. 
They sell a service to look after their customers, protect their money and are a financial institution that maintains a traditional relationship and way of working with its customers. During the complaints process with Coinbase, I found their communication ineffective, which further hides their conduct to management and diminishes the service offering to their clients. They are struggling to adapt their business offering in the ever-changing world of IT development. The internet is presenting a real problem which they choose to manage in a way which is not in line with rules and regulations of CFPB as well as their own internal policy and procedures sold to their clients. XXXX and I have suffered from a what I think a huge financial loss. I transferred thirteen times totaling $ XXXX from my XXXX XXXX XXXX banks/checking Account and XXXX XXXX XXXX debit card and XXXX XXXX XXXX debit card into Coinbase. 
From Coinbase to the fraudulent copycat/ duplicates investment company. Called http : //falconprofx.com. 
Later, I learned that this was a scam. I fell for the scam because I thought that it was a legitimate business I used Coinbase because is a very trustworthy company because of its great reputation. Therefore, I trusted Coinbase and gave in with my hard earned money. I transferred all that money into a fraudulent platform ; Unexpectedly ( from the present perspective ), Coinbase gave no warning not only that this is a flagged-for-fraud wallet, but also a verified one. That means that Coinbase has an untrustworthy verification system, therefore betraying our trust. In a second, all my hard earned savings were sent into a fraudulent platform, permanently losing it ( unless you help! ). 

Obligation : Commencing on XXXX, I fell victim to a copycats or duplicate investing platform scam operations run by http : //falconprofx.com which involved me making deposits to a supposedly a mining pool for a total amount of XXXX USD and approx. XXXX you can see on my receipts from my Coinbase account to these fraudulent copycat/ duplicates investment company. When determining whats reasonable and fair, we should focus on the issue of liability and security ; Common queries include, but are not limited to, the following ( i ) whether Coinbase did not take notice of any rule, law, or regulation, and/or possibly missed any material elements of the relevant bylaws or codes of conduct, that may have prevented them from protecting my financial safety ; ( ii ) whether by virtue of Coinbases custodianship over my funds or by its control over them, they owed a fiduciary duty to the me and if so, whether that duty was breached ; ( iii ) whether Coinbase promoted the transaction ( XXXX ) in question despite being aware of the nature of the transaction ( XXXX ) in question ( iv ) whether Coinbase was in compliance with its own policies and procedures ; ( v ) whether Coinbase owed duties to myself, what the scope of those duties was, and whether Coinbase did not uphold those duties ; ( vi ) whether Coinbases conduct was unfair ; and ( vii ) whether Coinbase has within its power the ability to, and should, compensate me for the harm that has befallen me. Upon identification of such unusual or suspicious activity, it is crucial that the relevant staff member adequately describe the factors making an activity or transaction suspicious, thoroughly depict the extent and nature of this activity and properly communicate to the customer that such activity meets the relevant criteria of fraud. In providing its services to a customer, a financial institution is required by law to exercise the care and skill of a diligent, prudent organization. In this case, this means that the payment service provider should not turn a Blind eye to known facts pointing to a real possibility that their customer is being scammed. In other words, Coinbase must have had special knowledge of what was occurring or been alerted to a real possibility of fraud taking place. The financial institution must have known or reasonably ought to have known that I was dealing with a scammer. Granted, there is room for diversity of view insofar as reasonableness is concerned. Indeed, there is a sense in which the standard of care of the reasonable person involves in its application a subjective element. However, it must be remembered that the correct test is always reasonable care in all circumstances, not average care. The fact that most people behave in a certain way may be good evidence that the conduct is reasonable, but this is not necessarily the case. Although reasonableness is a very fluid concept, all of the evidence suggests that Coinbase did not foresee the fraud and disregarded even the most obvious dangers in this respect. Situations do tend to repeat themselves and it is advisable to examine previous outcomes to see how the standard of the reasonable person should be applied, and that lessons can be learnt from the errors of the past. Coinbases Position : On XXXX, I have sent thirteen transactions for a total of XXXX USD from my account/debit I believe I deserve XXXX USD as a compensation. Refuting Coinbases arguments from a purely logical perspective : I do not consider it as reasonable and sufficient enough. You have to understand that as a result of this scam I lost all of my savings in the total amount of XXXX USD mind you this is after all your fees and approx. XXXX BTC you can see on my receipts. This is a huge part of my life and I need Coinbase to give me a better compensation. Coinbases position is the ( features ) of the situation at hand do not generate a genuine obligation to protect innocent and helpless victims ; they are essentially arguing that common-sense-based approaches are doomed to fail, leaving their exclusively technical account of the subject matter as the only meaningful choice. For reasons which are unclear, this extremely serious situation barely gets the attention it deserves even though ample evidence has been offered in support of this complaint. In Coinbases view, it is implied that we should not home in ( and consequently rely ) on unwritten laws, practicality, good judgement, reasonableness, sharpness, sensibleness, past outcomes, and insight, when taking appropriate precautions. To underscore, once again, such views are at odds with common sense and are wildly irresponsible. Imagine a view according to which the one and only thing that can make Coinbase morally obligated to do something is having it written down somewhere. Pursuant to this view, if Coinbase encounter the suffering of totally naive victims, they are only obligated to intervene in or remedy the situation, to the degree required by written material. This is unbecoming for a reputable establishment such as Coinbase. I have reviewed the material hereto sent by Coinbase carefully, and it unfortunately they provides a simple response of this transactions are in reversible there is nothing we can do response to my fundamental argument concerning the degree of care. Given its size, influence, and the resources at its disposal, this establishment clearly had a far greater capacity than an individual such as myself had, to determine the level and likelihood of risk that a client such as myself is subjected to and had a duty to intervene as they now do to query in particular out-of-pattern transactions of this kind. It is perfectly obvious that Coinbase, inadvertently, employs a subtle approach in addressing some of the key questions in a manner which neither provides me with adequate support nor protects anything other than its own interests. It is Coinbase here, who has the burden of proof, to show that it has exercised the duty of care, that is to say, that Coinbase adhered to a standard of reasonable care in relation to the matter at issue given its extensive experience compared to mine. It is Coinbase that claims that the damages which I have suffered in connection to this matter have not been reasonably foreseeable, and that my proposed degree of care is not, and has not been, commensurate with Coinbases capacity, experience, expertise, or scope of services in any way. To reemphasize, Coinbases indisputable overriding purpose is by no means to purely execute transactions in a careless ad reckless fashion, but rather to strike a balance between executing those transactions and capitalizing on its undeniably vast capabilities to protect consumers thereby enhancing market integrity.

Coinbase is obliged to take some action if it is sufficiently aware of a real possibility that a fraud may be being perpetuated. If they don't question its customers instructions or raise the possibility of a scam with the customer in these circumstances, it may be liable if the red flags indicate the customer is : particularly vulnerable, or if the possibility of fraud was serious or real, not just suspected. There are some recommendations to organizations for protecting customers from financial harm that might occur as a result of fraud or financial abuse ; and gives guidance on how to recognize customers who might be at risk, how to assess the potential risks to the individual and how to take the necessary actions to prevent or minimize financial harm. 


Sincerely, XXXX XXXX Transaction on Coinbase # 13 transactions XXXX $ BTC XXXX