Consumer complaint received 2017-06-22 00:00:00
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Fraud or scam — 
Company: Coinbase, Inc.
State: FL

Complaint narrative:
While trading with over {$4700.00} of USD on a cryptocurrency exchange known as XXXX which is hosted by Coinbase. On XXXX/XXXX/2017 there was a large order which was placed and XXXX XXXX  systems were unprepared to handle. This large order caused me and thousands of others like me to lose much money because their systems without monitoring and permissions from the account owners to liquidate positions without appropriate warning or the facilitation of a system that was able to handle requests.
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Because of an inability to act do to their own system malfunction and their refusing to communicate with their clients or admit err on their part I am seeking recompense for the money stolen from me by them and for them violating their own terms of service. I have filed reports with the Credit Bureau and the FDIC in regards to this matter.
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I have attached two documents showing the original order and the order which was changed without the ability to act upon the change.
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In response to this effect the company released this notice : " You 're receiving this email because your ETH-USD position experienced a margin call on XXXX XXXX, 2017.
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At XXXX PT on XXXX XXXX 2017, a multimillion dollar market sell was placed on the XXXX ETH-USD order book. This resulted in orders being filled from {$310.00} to {$220.00}, translating into a book slippage of 29.4 %. This slippage started a cascade of approximately 800 stop loss orders and margin funding liquidations, causing ETH to temporarily trade as low as {$0.00}.
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Our initial investigations show no indication of wrongdoing or account takeovers. We understand this event can be frustrating for our customers. Our matching engine operated as intended during this event and trading with advanced features like margin always carries inherent risk.
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We are continuing to conduct a thorough investigation and will keep customers updated with any resulting actions. With that in mind, it is important to note that these trades are final, in accordance with our XXXX Trading Rules ( Section 3.1 ). Honoring properly executed orders is critical to maintaining the integrity of an exchange.
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In response to the large price movement we decided to temporarily halt trading of ETH-USD. Once we confirmed all systems were operating correctly, we restored trading when in accordance with our Downtime Process ( Section 5 ).
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XXXX XXXX XXXX Regards, XXXX Team '' While they state that this is in accordance to their XXXX Trading Rules, it is not as demonstrated here : XXXX terms state : 3.1 All Fills are final and will not be reversed unless : ...
b. Due to a serious technical error, Orders or Fills do not occur as specified in these Rules - in which case Coinbase will make all reasonable efforts to restore all Traders to the position they would have been in had the error not occurred.
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I would consider this a serious technical error given the misalignment with the overall market.
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3.4 If technical reasons prevent or degrade Traders ability to place or cancel Orders, or prevent or degrade access to XXXX XXXX or the Web Interface or affect the operation of XXXX Order Books or matching engines, then Coinbase may, in its discretion, take one or more of the following actions in respect of one or more Order Books.
...
b. Cancel Open Orders.
c. Disable the ability to place new Orders ( Cancel-Only Mode ).
d. Disable sign-in.
e. Disable the XXXX XXXX.
f. Disable access to the Web Interface.
...
At the time of the crash, I could not log into the interface, data was unavailable, I was logged out, etc. I consider this a valid technical reason for controlling the book. I do n't think anyone will dispute the challenges recently faced regarding web site and API access during volatile periods.
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Thank you for your efforts and I appreciate you taking the time to review and assist in regards to this outrageous matter.

Company response to consumer: Closed with explanation