Coinbase has a problem. As interest in Bitcoin has soared along with its price, the popular cryptocurrency exchange has found itself the target of a growing spate of angry customers who haven’t been able to access customer service.
A quick look at Twitter tells the story. As one upset user of the service ranted earlier today: “Multiple issues over the last month which cost me $$$ several open cases and 0% response?? When are you going to help me or is it easier to just forget. This wont be so easy when your publicly traded. Will be following up with [SEC] soon.”
There are many (many) similar complaints to be found.
In the interest of full disclosure, this editor asked the company this week for more insight into its customer service operations after emailing its support staff more than a half dozen times and tweeting once over 10 days, and receiving no response. (I bought one unit of Ether in 2018 on the platform and wanted to access my account, which I’d been locked out of nearly two years ago.)
To its credit, Coinbase today issued a statement, promising to do better. Its VP of customer success, Casper Sorenson, wrote on the company’s blog that Coinbase is “committing to a better customer experience during this time of heightened interest in the cryptoeconomy.” The company says it is adding more people to its team; adding more self-service options (there are startling few); expanding its “help center”; and launching a new educational site, Coinbase Learn, “as a one-stop-shop for first timers, experienced investors, and everyone in between.”
Most meaningful perhaps, Coinbase says that in the coming months, it will begin offering live messaging with Coinbase representatives, which is not currently an option. Indeed, Coinbase does not offer live support of any kind. A help support phone line is only available to users wanting to freeze their accounts, and it is automated. (The flip side of its slow customer response times may tie to the apparent seriousness with which Coinbase, which works closely with regulated banks, takes security issues.)
Either way, the company will have to do far more for its increasingly mainstream users as a publicly traded outfit, both because regulators will undoubtedly take a greater interest in its unhappy customers and because it will otherwise lose existing and potential clients to rivals, of which there are a growing array, from the international payment giant PayPal, which is now seeing record daily cryptocurrency trading, to investment brokers like Robinhood. (Another increasingly popular option: digital asset managers like Grayscale, whose trusts are publicly traded over the counter.)
More attention to the issue appears overdue. While Coinbase has presumably been dealing with a surge in complaints that corresponds with the volatility of Bitcoin’s ups and downs, customer service has been an ongoing issue for the nearly nine-year-old, San Francisco outfit, which filed its confidential form with the SEC in December to go public and says it has 35 million users in more than 100 countries.
In 2018, Mashable obtained 134 pages of complaints filed to the SEC and the California Department of Business Oversight following a five-month FOIA process, and the picture that emerged was “not of a responsible actor in the cryptocurrency space opening the market to new investors, but rather a company overwhelmed by and underprepared for its own success,” the outlet reported at the time.
Asked today, among other things, how Coinbase’s processes have since changed, how many of its more than 1,200 employees are focused on customer support, and whether the outfit could share its latest customer numbers, Coinbase, currently in its SEC-mandated quiet period, declined to comment.
Coinbase has raised $547.3 million in venture backing over the years, according to Crunchbase. Tiger Global Management, which is currently raising up to $3.75 billion for its newest fund, led Coinbase’s company’s most recent private round, a $300 million Series E financing that closed in 2018 and assigned Coinbase a post-money valuation of $8 billion.
Last September, the company parted ways with more than 5% of its employees, after cofounder and CEO Brian Armstrong publicly discouraged employee activism and political discussions at work, then offered severance to staffers who were uncomfortable with the policy.
Roughly 60 people took the company up on the offer, Coinbase itself later revealed.
Coinbase’s IPO has been eagerly anticipated by many, though changes in Washington could potentially have a dampening effect on the company and other exchanges.
Coinbase’s own former chief legal officer, Brian Brooks, was last summer appointed as the acting head of the Office of the Comptroller of the Currency (OCC), and among his other crypto-friendly efforts, he published interpretive letters and announcements declaring that banks can partner with crypto custodians and conduct payments using stablecoins.
It was never entirely clear how much weight those letters and announcements carried. Asked last week about Brooks’s most recent interpretive letter, in which he stated that financial institutions can participate as nodes on a blockchain and store or validate payments, the FDIC said in an emailed response that it had no comment.
Asked last week if Brooks’s letter signaled changing U.S. monetary policy, the U.S. Treasury Department did not respond to our press request.
Brooks’s reign has ended, in any case. With a new incoming administration, he resigned from his position this week, replaced by a career OCC employee, Blake Paulson, who may himself be replaced by incoming President Joe Biden. The change leaves question about how and whether the agency’s tone toward cryptocurrency will change.
Meanwhile, Gary Gensler, a former financial regulator and Goldman Sachs banker who has most recently been teaching at M.I.T. is expected to be nominated to lead the SEC. He is also expected to welcome greater oversight of the $1 million cryptocurrency market than Jay Clayton, the Wall Street attorney who stepped down from the role last month after three years.
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