Coinbase Review 2024: My Money Is Being Held Hostage

Updated connected September 6th, 2024

Update: Coinbase yet released my costs aft months. I ended up closing my relationship afterwards. The institution is unacceptable.

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Crypto has started going crazy again pinch nan expected January Bitcoin ETF support and nan BTC Halving connected platform successful nan first 4th of 2024. This has brought a batch of group specified arsenic myself retired of hibernation to commencement adding to holdings, and of people nan first measurement successful this process is utilizing a USD Fiat to Crypto speech on-ramp.

In this article I reappraisal my acquisition pinch Coinbase Global, nan astir good known speech successful nan US.

Coinbase Has Never Been Competitive

Coinbase is nan astir good known crypto speech successful nan US because they person been astir since nan early days of crypto and connection a referral programme that ever encourages group to signup to a level because their friend is recommending them, successful a biased manner to get a commission, of course.

Furthermore, since they are a publically traded company, it gives them immoderate clout and immoderate anticipation that they will tally nan institution supra board.

I ne'er bothered to motion up pinch them earlier because each twelvemonth aliases truthful I measure which on-ramp options are disposable to USA customers and each clip I person looked, they were ever astatine nan apical of nan database for nan astir costly and highest fee’d avenue levied against nan trader.

Converting fiat USD to crypto ever costs something, but minimizing fees (relative to execution) successful an finance is an important facet of retaining profits whether it beryllium crypto trading, banal investing aliases existent property investing.

There Is Only One Benefit Of Coinbase

I precocious signed up pinch Coinbase because they advertise that they are trying to summation nan take of USDC, their USD based stablecoin, and connection you nan opportunity to person USD fiat to USDC for free, and nonstop it externally for free.

That’s a importantly valuable connection that shaves anyplace from 0.25%-1% disconnected nan costs of different platforms and its highly useful for group remitting payments to family members abroad, sending to different exchanges and reducing trading costs, aliases engaging successful DeFi transactions pinch your ain backstage keys.

I asked 1 of nan crypto aficionados successful nan WantFi telegram chatroom if he had utilized them to nonstop USDC to 1 of his different exchanges and he said that he hadn’t yet had a problem, truthful I decided to jump aboard pinch nan technique.

However, I soon regretted it.

Account Restricted

A speedy hunt connected Reddit aliases Trustpilot and different reappraisal platforms will archive nan wide struggles of having one’s relationship restricted and locked for nary evident logic and being incapable to retreat funds.

And past location was this people action lawsuit revenge against Coinbase for nan aforesaid reason.

Well, nan aforesaid point conscionable happened to me.

Now nan unusual point is that it happened correct aft they raised my ACH publication limits from a measly $250 a time to $5,000 a day.

I contributed $5,000 2 days successful a statement and past they locked my relationship pinch nan generic reasoning of “fraud prevention.” So past why were my limits raised? Why americium I flagged erstwhile I usage my allowed limits? Why don’t nan selfies and pictures of my ID alleviate nan “fraud prevention” issue? I can’t get immoderate answers.

The Coinbase Support Sucks

Coinbase customer work is fundamentally non-existent.

After aggregate support inquiries I cannot get immoderate consecutive answers. They garbage to show maine why my relationship was suspected of “fraud” aliases why I was flagged. No answers fixed isolated from “wait 2 months, peasant!”

Two months is an outrageous magnitude of clip for “fraud prevention.” No slope relationship aliases brokerage work would effort nan aforesaid stunt since they are regulated.

You tin get a quality by typing “operator” into nan virtual chat, usually aggregate times and past waiting 20 minutes, but don’t expect immoderate answers. Just platitudes astir “being patient” and “I understand your frustration.”

The worst portion is astatine they won’t moreover conscionable nonstop nan costs backmost to nan original source. Surely if nan interest was “fraud prevention” wouldn’t sending nan costs backmost to nan original slope relationship alleviate nan concern?

They declare it is an outer emblem but I contacted my slope and they said location was thing incorrect pinch nan ACH transfer. Coinbase is conscionable trying to supply screen for holdings my costs hostage for immoderate chartless reason.

The sanction connected nan slope relationship is excavation and matches nan sanction connected nan Coinbase relationship and I person verified my personality aggregate times pinch selfies and pictures of my ID, truthful location should beryllium nary interest astir fraud.

Someone had suggested that they do this to forestall money laundering, but money laundering is not electronically transferring costs from a verified slope relationship to different account. Money laundering is concealing nan root of bad, criminally obtained costs and making them look from morganatic business operations utilizing rate aliases bearer instruments.

I revenge a general complaint, which is simply a prerequisite measurement to starting nan mandatory arbitration process and their reply email said that they will return 45 BUSINESS days to get astir to reviewing it. Like what nan existent F#%&@! What institution responds to customers aft 2.5 almanac months?

Coinbase Is Much Of The Public’s First Encounter With Crypto

Coinbase is expected to beryllium spearheading nan take of crypto, but I’ve ne'er had a azygous morganatic financial work dainty maine nan measurement that they person and garbage to nonstop backmost my costs until they are bully and fresh successful nan sanction of “fraud prevention.”

How galore group caller to crypto are having this acquisition arsenic their first experience? If they want their manufacture to flourish, they surely aren’t doing a awesome occupation pinch nan aforesaid acquisition they person offered to hundreds of group successful a akin situation. It’s not a bully look and astir apt has stopped a batch of group from continuing further into nan space.

Could you ideate a slope relationship aliases banal brokerage doing this to you? No wonderment why senators are calling for monolithic regulations connected this space.

Coinbase Preys connected Ignorance With Their Fees

Coinbase fundamentally caters to nan crypto newbie and treats them accordingly by preying connected their ignorance astir nan manufacture and raping them pinch fees.

Here’s what I mean astir nan Coinbase fees. If you conscionable signed up and don’t cognize thing astir buying crypto different than you tin bargain Bitcoin aliases different cryptos there, you’ll login and beryllium presented pinch a surface to do conscionable that.

You’ll quickly find that it costs ~$15 to acquisition $1000 worthy of Bitcoin, which is precocious by immoderate standard. Even earlier committee free banal trading, commissions utilized to apical retired astatine $8 a trade.

Given your newness to nan industry, aliases imaginable referral nexus proposal from a friend, you mightiness deliberation its nan norm and acceptable.

What you won’t announcement is nan further dispersed they cook into nan acquisition value which puts different ‘variable’ interest correct into their pockets. Sneakily, they show you nan speech rate, not nan value of BTC that you are buying astatine which hides nan added spread.

And that’s only 1 broadside of nan trade, you’ll person to salary different 1.5% + dispersed erstwhile you sell.

What you astir apt won’t find very easy is that you tin trim this interest successful half if you tin make your measurement to nan Coinbase Advanced Trade screen. If you are a crypto newbie, that mightiness sound excessively “advanced” and you mightiness not click connected it successful nan first spot if you tin find it done nan menus.

But 0.8% is still excessively precocious for nan options disposable retired there. And remember, that is connected some nan bargain and nan sell, truthful you are eating astatine slightest 1.6% connected each round-trip trade.

Coinbase Front-Runs Crypto Exchange Listings

Another logic why they tin costs you money is that they cognize which coins they are going to database onto nan platform. Not only do they person to bargain up immoderate supplies to connection to customers, immoderate worker who knows what coins are astir to beryllium listed tin spell elsewhere and beforehand tally nan listing, which raises nan value that their customers pay.

Several of their merchandise managers were caught doing this, referred to arsenic insider trading, and were charged and yet plead guilty. However, Bloomberg reports that nan problem apt goes overmuch deeper than conscionable nan fewer individuals busted since coins and tokens commencement to admit agelong earlier Coinbase lists them.

Who knows really overmuch this has indirectly costs Coinbase traders.

Does Coinbase Have Financial Problems?

The first norm astir holding crypto is that you should NOT HOLD IT ON EXCHANGES. The norm of thumb is that you behaviour your transaction, and past withdrawal your crypto to a backstage wallet. Not your keys, not your crypto.

So galore exchanges person either been hacked aliases person turned retired to beryllium frauds aliases misused customer funds, starring to bankruptcies and customers being hung retired to dry.

When a crypto speech starts restricting your withdrawals, that is simply a very concerning business and makes you mobility if they are utilizing your customer costs to tally their operations and are playing basking murphy pinch deposits.

I really dream that is not nan logic here, but 1 speedy look astatine their SEC financials shows that they suffer a batch of money each azygous twelvemonth and person amazingly ne'er managed to move a profit moreover though they are nan largest US speech and person very precocious fees.

Everyone thought that FTX was supra committee until nan truth came out. I consciousness very uncomfortable that Coinbase is forcing maine to holding money connected their level against my will.

US Citizens Unfortunately Have Limited Options

There are exchanges that connection 0% fees aliases spreads to nan crypto transaction, but immoderate of nan amended options are constricted to non-US citizens.

Unfortunately, nan US authorities treats everyone for illustration a violent aliases supplier cartel kingpin until proven guiltless truthful a batch of nan amended speech options aren’t disposable to Americans. The US requires financial entities to Know-Your-Customer (KYC), but Coinbase likes to return it to bosom that they are nan enforcement limb of nan US authorities and will request to cognize specifications astir wherever your backing came from, wherever it’s going, what employment you have, letters from your bank, and screenshots of statements. It’s really not their occupation aliases spot to inquire for specified specifications erstwhile they person verified personality documents for their ineligible requirements.

No slope aliases banal brokerage has asked maine for nan benignant of worldly that Coinbase has. They are deliberately going supra and beyond nan telephone of work here, and to what end?

Ultimately I deliberation they are conscionable trying to trap maine onto their level since they won’t fto my costs exit.

What Do I Plan To Do?

About nan only point that I tin do correct now is record complaints to nan various reappraisal platforms, blog astir my experience, and record a title pinch nan Financial Regulator successful my authorities since nan money is excessively mini to invoke different ineligible avenues.

It’s rather unfortunate it has to travel to this but services for illustration Coinbase request to beryllium fined aliases shutdown if they are going to dainty their customers this way. They are doing nan manufacture a disservice.

Once I get my costs back, I will adjacent my relationship because holding my costs hostage for 2 months is wholly unacceptable.

Have you had a akin situation? Comment beneath and subordinate nan Telegram chatroom.