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My Money Stuck In Coinbase Discussion Consumer Law, Warranties

Discussion in 'Consumer Law, Contracts, Warranties' started by AGuyInCalifornia, Jul 4, 2021.

  1. AGuyInCalifornia

    AGuyInCalifornia Law Topic Starter New Member

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    Jurisdiction:
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    I have money that I am unable to withdraw from Coinbase which I could get into if interested for discussion. It seems my only option is to proceed with arbitration to get to my money in the long term.

    If one where to look into it, you'll discover that Coinbase is essentially ignoring helping people leading to a lot of complaints against them. Despite trying for weeks, I have not been able to get one answer to anything from Coinbase. And others are reporting that Coinbase is essentially opening and closing cases without any resolution.

    Others have suggested that I may want to also attempt filing a complaint here as well:
    1. Consumer Financial Protection Bureau (CFPB)
    2. Securities and Exchange Commission (SEC)
    3. Better Business Bureau (BBB)
    4. Local Attorney General: In my case for the state of California this would be "Rob Bonta"
    My question is if there is any benefit to complain to either of the above now prior to arbitration? Or, is it best to wait until I head into arbitration or even after arbitration before filing a complaint with either of them?

    I'm happy to get into the details of how and why for everything, but I want to start somewhere.
     
  2. Tax Counsel

    Tax Counsel Well-Known Member

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    Complaint to the BBB will be pretty much worthless. It's a private organization and has no enforcement powers whatsoever.

    Each government law enforcement agency has different areas of jurisdiction. In order to know what agencies might do something about this it would be important to know some details about what is going on. Why does Coinbase have your money and why are you having trouble accessing it? What services is this company providing to you (or supposed to be providing you)? As for timing of you complaints, that's up to you. Just bear in mind that it's best to be consistent in what you tell the government agencies and what you assert in your arbitration proceeding. If you are inconsistent that may undermine your efforts to get a resolution.
     
  3. adjusterjack

    adjusterjack Super Moderator

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    I don't think any of those agencies will do you any good either before or after arbitration. You invested in cryptocurrency. Cryptocurrency is unregulated and relies on secrecy and anonymity. It's rife with scams, money laundering, tax evasion, and absolutely no protection for the consumer.

    And now that are losing your shirt you want regulatory agencies to help you? Good luck with that.
     
  4. Red Kayak

    Red Kayak Well-Known Member

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    My cousin has a friend in Nigeria...
     
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  5. AGuyInCalifornia

    AGuyInCalifornia Law Topic Starter New Member

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    I appreciate the response Tax Counsel. It's a sincere problem that I am having with Coinbase.

    The short of it, is the following (which I hope doesn't sound too confusing, but you are free to ask questions too as it is a nice civil and stable conversation I look to having):
    1. Transferred money from my bank via ACH into Coinbase.
    2. There is a clearing process after a person deposits into Coinbase. In my case, Coinbase informed me that it would take 7 days for the clearing process of the deposit to clear.
    3. Now, during the 7 days you are prohibited to withdraw your funds during the clearing process. However, you are free to "trade" your US dollars into any Crypto Currency you like. You are just not allowed to pull out what you traded until the money you deposited clears.
      1. In my case, I converted my US dollars into what is known as USDT. USDT is known as a stablecoin with a 1 to 1 matching with a US dollar. Therefore, 1 USDT = 1 US dollar. It's also
      2. Therefore, on day 1 after my deposit, I converted my US dollars that I deposited into USDT. And the USDT sat on Coinbase the full duration of those 7 days.
    4. All is fair and clear up to this point!
    5. After the 7 days passed, I attempted to withdraw my USDT. To do this, you can withdraw your USDT by sending it to your Crypto Wallet: that is how people withdrawn their money in a normal manner. A crypto wallet is essentially external to Coinbase where people store their coins. There is nothing wrong or illegal in anyway with this. The point here is once a Withdraw, the Crypto Currency is essentially out of Coinbase's hands.
    6. The problem now: Upon the withdraw of my USDT, Coinbase put the withdraw on hold. They placed my withdraw in what is known as "Hold on orders". The withdraw transaction was frozen and put into a "Pending" state.
    There are few points to be made here:
    1. When a withdraw occurs normally from the Coinbase exchange, the Crypto Currency is sent out of their network into the public network (i.e. from Coinbase Exchange to external blockchain). Once they send your funds out to the external network, Coinbase will then generate a "Transaction Hash" which identifies that the Withdraw occurred successfuly and the USDT has been sent OUT of the Coinbase Exchange into the world (or on the blockchain).
    2. However, in my case, Coinbase never sent out my Crypto Currency. Again, it's stuck in "Pending" state on the Coinbase exchange and placed into the "Holds on orders". No "Transaction Hash" was ever generated.
    3. Can you cancel the transaction? No. You can do nothing because Coinbase provides no solutions/options.
    4. Now that my withdraw is stuck in "Pending" and "Holds on orders", effectively all my cryptocurrency that I was attempting to withdraw is untouchable by me. I can't cancel the transaction, I can't trade the USDT back into US dollars (for example). I can do nothing with my money.
    5. Therefore, my money remains on the Coinbase Exchange with no way to withdraw the money. There is nothing I can do.
    There lies the problem.

    What does a normal person do? They contact Coinbase to open a "Case" for this to be resolved. Like a normal bank institution or what have you, you can actually talk to someone to resolve the problem. Coinbase has no "human" support except to simply open a Case.

    But herein lies the real problem with Coinbase:
    1. Coinbase is not resolving cases in a timely manner. In my case, I have had no resolve to this problem for weeks.
    2. Coinbase is not answering questions.
    3. People are even reporting that once people open up a Case, that Coinbase essentially just closes them without resolving problems.
    The only other places where people could go to request help therefore is:
    1. Coinbase (through the form of the "Case" or "Complaint" process)
    2. Reddit: Coinbase has official support to help Coinbase users through Reddit.
    3. Twitter: Official help on twitter as well.
    But go to Reedit, and you'll see everyone complaing about the lack of help from Coinbase. I'm certainly not the only one. Everyone is having problems with Coinbase.

    If you even dig deeper, you'll see people have class action lawsuits open against Coinbase for locking them out of their accounts. Example lookup "Leone et al. v. Coinbase, Inc." Bad things are happening with Coinbase.

    Coinbase "Complaint" Process:

    When all fails, you can go to Coinbase and open up a "Complaint". The Complaint process is the last step a person can take if one believes Coinbase is not resolving issues through normal means (i.e. properly resolving cases).

    The bottom line is, Coinbase is ignoring to resolve cases and complaints as reported by many others. And, like in my experience so far and as I can only speak for myself, Coinbase to-date has never answered one question to either of my cases or my single complaint also. There has not been one single answer as to (1) the time frame to when my withdraw will succeed or (2) why my withdrawal is on hold in the first place. There is not one answer to anything from Coinbase! No answers and no way to get answers in any timely manner in communication with Coinbase or in asking for some support.

    At the time of writing, I'm in the process of waiting for Coinbase to respond to my official "Complaint". The "user agreement" states for a given "Complaint" the following must happen first:

    8.2.2. Coinbase Response: "We will acknowledge receipt of your Complaint form after you submit it. A Coinbase customer relations agent ("Agent") will review your Complaint. The Agent will evaluate your Complaint based on the information you have provided and information in the possession of Coinbase. Within 15 business days of our receipt of your Complaint form, the Agent will address the issues raised in your Complaint form by sending you an e-mail ("Resolution Notice") in which the Agent will: (i) offer to resolve your complaint in the way you requested; (ii) make a determination rejecting your Complaint and set out the reasons for the rejection; or (iii) offer to resolve your Complaint with an alternative solution. In exceptional circumstances, if the Agent is unable to respond to your Complaint within 15 business days for reasons beyond Coinbase's control, the Agent will send you a communication indicating the reasons for any delay in answering your Complaint, and specifying the deadline by which the Agent will respond to your Complaint, which will be no later than 35 business days from our receipt of your Complaint form."​

    However, other Coinbase users are reporting on Reddit that through the "Resolution Notice" response to them that Coinbase is simply stating something like, "Please wait another 15 days" or wait some other extended period of time.

    Additional Complaint Filing Considerations:

    As I mentioned earlier, others have suggested that I may want to also attempt filing a complaint here as well in the interim:
    1. Consumer Financial Protection Bureau (CFPB)
    2. Securities and Exchange Commission (SEC)
    3. Better Business Bureau (BBB)
    4. Local Attorney General: In my case for the state of California this would be "Rob Bonta"
    Please let me know if it is advised to file my complaints with them NOW or after I have received a response from Coinbase in their "Resolution Notice"? Typically, I would be OKAY with waiting. However, with so many complaints as it is with Coinbase on Reddit, I'm not sure if I should just file my complaint immediately now since it seems likely Coinbase will not act anytime soon. It's for this reason I am asking about additional steps I can take?

    It sounds like, from what you said Tax Counsel, that there is no point in contacting the BBB. What about the others mentioned above (CFPB, SEC, or local AG)? Any thoughts on filing additional complaints through one or all the additional channels mentioned above outside of the BBB? Would any of them listen to complaints about Coinbase?

    Question(s):

    I don't know if that is true where Coinbase is responding in their "Resolution Notice" that they want extra time, but here's where I am a bit confused: what do I do if Coinbase does not resolve my issue in their "Resolution Notice" response to me? Or, let's say I'm not satisfied where they are still not allowing me the ability to withdraw my funds from Coinbase. What do I do then?

    I get the sense from those on Reddit, that Coinbase is essentially dragging their feet and kicking the can down the road so to speak. In other words, what does this "the Agent will send you a communication indicating the reasons for any delay in answering your Complaint, and specifying the deadline by which the Agent will respond to your Complaint, which will be no later than 35 business days from our receipt of your Complaint form." effectively mean?

    Could Coinbase in their "Resolution Notice" say that they want another 3 months in "specifying the deadline" to me? If so, that would be ridiculous! Or, does the "35 business days" timeframe mean they must resolve the issue by then and if not I could then proceed with arbitration? This is where I'm not sure from a legal perspective.

    If they did that (i.e. continue to kick the can down the road), couldn't I just immediately file for "Arbitration" anyway?

    Current bottom line question: at what point can I file for "Arbitration" against Coinbase regardless of Coinbases response in their "Resolution Notice"? There's so much chaos with regards to Coinbase lack of timeliness that I'm not sure what exactly to do from a time perspective or at what point. But, yes, I do want to get my funds out of the Coinbase Exchange as soon as I can.

    From my understanding, my only course of action to get my money out of Coinbase is through the "Arbitration" process. Because of this, I can't file a lawsuit or a class action lawsuit or anything else as far as I am aware. However, feel free to correct me where I am wrong.

    I am okay to follow the process, but I do want to make it to "Arbitration" as quickly as possible to get all of this resolved in a timely manner. I don't want this to drag on for months and months because Coinbase doesn't want to resolve the problem quickly as possible at the expense of myself or expense of others. Thankfully my money is in USDT, and not some other cryptocurrency that could very well depreciate in the blink of a day or two. But, that lack of timeliness in Coinbase's action is appalling.

    Suggestions, feedback, comments, or any advice would be great!

    Right now, I'm simply trying to determine how to proceed forward with resolving my problem while waiting for Coinbase to send me the "Resolution Notice" to my formal complaint against them.

    Meanwhile, I'd like to stay proactive with regard to my problem and prepare in advance as much as I can as to what the next steps should be once I receive the "Resolution Notice" from them.
     
  6. Tax Counsel

    Tax Counsel Well-Known Member

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    The SEC would do you no good. Your problem is not with securities (e.g. stocks, bonds, etc) that Coinbase issued to you nor is Coinbase a dealer in securities. You can try the CFPB, the California Department of Consumer Affairs or the California Attorney General's consumer complaint page. That said, just from your description I'm not seeing anything suggesting any federal law has been violated, so the CFPB might not be able to do anything for you. I don't know California law well enough to say if any California laws are violated and if so which is the appropriate agency to make your complaint.

    According to part 8.3 of the terms of service agreement with Coinbase you may resort to Arbitration or small claims court (assuming your situation would qualify for small claims court) if you are unable to resolve the matter through the "Formal Complaint Process". It appears that the company must provide its response to your complaint no later than 35 days after it received your complaint. So it seems to me that if you don't have a resolution by 35 days after the company received your complaint you could move to arbitration/small claims court.
     
  7. army judge

    army judge Super Moderator

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    Is that the guy that's a friend of a wealthy, Nigerian Prince who simply wishes to bestow millions of US Dollars and gold buillion on "lucky" unsuspecting people?
     
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  8. Red Kayak

    Red Kayak Well-Known Member

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    Well... that's his reason for not paying for his auto insurance... helping his Nigerian friend.

    One need not be brilliant to be a skeptic.
     
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  9. AGuyInCalifornia

    AGuyInCalifornia Law Topic Starter New Member

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    You have already been very helpful Tax Counsel . I'm truly grateful for your time on this matter.

    The options suggested, if pursued:

    1. Consumer Financial Protection Bureau (CFPB)
    2. Department of Consumer Affairs (DCA)
    3. Local Attorney General: In my case for the state of California this would be "Rob Bonta"
    I understand you are saying that nothing has been violated at the federal level. And, in general, I would probably also add that perhaps nothing has been violated just yet until "Arbitration" has completed. As much as I don't like it from a time perspective, I realize that I have to follow the process set forth in the Coinbase User Agreement. At least here you have helped me to narrow the timeframe.

    However, as to whether I could or should file a "complaint" for the hassle being caused to users on Coinbase, like myself, is a bit of a grey area as to the timing and if I felt I wanted to take that extra step.

    I suppose, to be most effective, the suggestion may be to file a complaint during or after arbitration has finished in the event it got to that point. I tend to think if I got to the arbitration phase where they didn't resolve the matter or even had to start arbitration to get a matter resolved, I could start complaining to any of the above at that time for having to take such drastic levels to get what could have been a simple issue resolved. The complaint is just that, to inform the state that such events are occurring with Coinbase users and me as one of them who had funds lock up for a lengthy period of time (especially if found to be for no good apparent reason). They (CFPB, DCA, or local AG) can then look into it if they want after the complaint is filed to see if how things are being handled are done correctly.

    In general, let's assume I deposited money into Coinbase which is an exchange and Coinbase essentially decides to lock up my funds for 1 month. At what point could a user of Coinbase deem their user rights have been violated? After 1 month? 2 months? 3 months? Half a year? How does one measure the threshold of what is happening as not being appropriate or correct where something additionally must be done to resolve the matter? I don't know how to answer that one, but of course I suppose a lot depends on what has happened too which I attempted to lay out in the short time frame we have this discussion so far. But, certainly there is a timeliness component too it as well so I tend to believe. Everyone is free to correct me!

    I also am sure you could understand that any person who felt their money was being locked up for what they believe to be an excessive period of time would try in such a case to get their funds back. I don't think anyone can fault anyone for that especially if it turns out that they really didn't do anything wrong. Like I said, I have yet to be informed by Coinbase as to why my funds are in the state of "Pending" upon a withdrawal and where the withdrawal balance is placed in "Holds on orders".

    Any answer to any of my questions from Coinbase would be helpful. I, like others, are not getting any answers. I'm right now in a learning process about everything too. I never thought I'd have to ever ponder arbitration, but here I am. It would be irresponsible to not try to get my money or work towards that path.

    In any case, it sounds like from the above the suggested jurisdiction for complaining about Coinbase would be best suited to the state I am instead of federal. Good to know!

    In my case, the claim amount ($$$) would be beyond what I could claim through small claims court. For me, the arbitration path seems to be what I would have to pursue to get all my funds back from Coinbase. It's why I'm so adamant about it.

    From all the ranting on Reddit (again, where Coinbase has Official Support), I am of the impression that Coinbase almost expects users to have to escalate to such a level as arbitration to get matters resolved unfortunately. They almost are counting on the fact that most users are probably not looking at their User Agreement to find the finer details. Because of this, it would seem a lot of users get stuck in step one of the formal process of simply opening up multiple cases and never even going down the Complaint process. And, then if they go down the complaint process, they get stuck there are step 2 and don't know what to do. A lot of people seem to report they have opened cases for even months with Coinbase essentially ignoring them.

    It's the very reason why I came here in seeking another path for discussion considering the chaos on Reddit where Coinbase expect users to go to request help (like I mentioned in my earlier posts). It does no good asking people how to get an issue resolved if they themselves have been suck for months not getting their own issues resolved. It's must easier to have a better discussion here then on there.

    I was unsure as to when I could file for "Arbitration" if Coinbase essentially drags their feet or kicks the can down the road. Your input helps to validate that I could perhaps file for arbitration if there is no resolution after 35 days. That is great! That has given me piece of mind and is what I needed: a timeframe that simply doesn't go on and on because Coinbase deems it so. At least now I understand the worst case from a timeframe perspective with a bit more confidence.

    As I look more into this and read the User Agreement in more detail, I will continue to keep everyone posted as to how things go or what happens in my case as I continue forward.

    I will continue to be active on this matter until I get my funds back. I look forward to sharing that with you good or bad.

    Thanks again Tax Counsel.
     
  10. AGuyInCalifornia

    AGuyInCalifornia Law Topic Starter New Member

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    Tax Counsel... had to remove your links in your post because it wouldn't let me post with it. I guess because I'm still a new user on here.
     

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