Coinbase Focuses on Customer Experience After Complaints

Coinbase is currently facing challenges. As the value and popularity of Bitcoin have increased, the cryptocurrency exchange has experienced a rise in frustrated customers struggling to get assistance from their support team.

A review of recent posts on Twitter illustrates the issue. One dissatisfied customer expressed earlier today: “I’ve encountered several problems in the past month resulting in financial losses, with multiple support tickets submitted and no response whatsoever. When will I receive help, or will my concerns be ignored? This situation will become more critical once the company becomes publicly traded. I will be contacting the [SEC] for further assistance.”

Numerous similar grievances can be found online.

For the sake of transparency, a member of our editorial team contacted the company this week to inquire about its customer service procedures, having sent over six emails and one tweet to their support channels over a ten-day period without receiving a reply. (An Ether unit was purchased on the platform in 2018, and access to the associated account had been lost almost two years prior.)

The company did release a statement today, pledging improvements. Casper Sorenson, Coinbase’s Vice President of Customer Success, stated on the company blog that Coinbase is “dedicated to enhancing the customer experience during this period of increased activity in the cryptocurrency market.” The company reports it is increasing staffing levels, expanding self-service resources (which are currently limited), improving its “help center,” and launching Coinbase Learn, a new educational platform “designed to serve beginners, seasoned investors, and everyone in between.”

Perhaps most significantly, Coinbase announced plans to introduce live messaging with customer representatives in the coming months, a feature currently unavailable. Currently, Coinbase does not provide any form of live support. A telephone support line exists solely for users seeking to freeze their accounts, and it operates through an automated system. (The delays in customer response times could be linked to the high level of security Coinbase maintains, given its close collaboration with regulated financial institutions.)

Regardless, the company must significantly improve its services for its growing user base as a publicly traded entity. This is due to the increased scrutiny from regulatory bodies and the potential loss of customers to competing platforms, such as the international payment system PayPal, which is currently experiencing record levels of cryptocurrency trading, and investment firms like Robinhood. (Another increasingly favored alternative: digital asset management companies like Grayscale, whose trusts are traded publicly over-the-counter.)

Greater attention to this matter seems necessary. While Coinbase has likely been managing a surge in complaints coinciding with Bitcoin’s price fluctuations, customer service has been a persistent concern for the San Francisco-based company, founded nearly nine years ago. The company submitted its confidential IPO filing with the SEC in December and reports having 35 million users across more than 100 countries.

In 2018, Mashable obtained 134 pages of complaints submitted to the SEC and the California Department of Business Oversight through a five-month Freedom of Information Act request. The resulting report characterized Coinbase not as “a responsible participant in the cryptocurrency market, facilitating access for new investors, but rather as a company overwhelmed and unprepared for its own growth,” as the publication stated at the time.

When contacted today for further information, including details on how Coinbase’s procedures have evolved, the number of employees dedicated to customer support, and recent customer statistics, Coinbase declined to comment, citing its current SEC-mandated quiet period.

According to Crunchbase, Coinbase has secured $547.3 million in venture funding throughout its history. Tiger Global Management, currently raising up to $3.75 billion for its latest fund, led Coinbase’s most recent private funding round, a $300 million Series E financing completed in 2018, which valued the company at $8 billion.

Last September, the company reduced its workforce by over 5%, following cofounder and CEO Brian Armstrong’s public discouragement of employee activism and political discussions at work, and subsequent offer of severance packages to employees uncomfortable with the new policy.

Approximately 60 employees accepted the severance offer, as Coinbase later disclosed.

Coinbase’s IPO has been widely anticipated, although potential shifts in Washington’s policies could impact the company and other exchanges.

Brian Brooks, Coinbase’s former chief legal officer, was appointed as the acting head of the Office of the Comptroller of the Currency (OCC) last summer. He issued interpretive letters and announcements supporting partnerships between banks and cryptocurrency custodians, and the use of stablecoins for payments.

The extent of the influence of these letters and announcements remained unclear. When asked last week about Brooks’s latest interpretive letter, which stated that financial institutions could participate as nodes on a blockchain and validate payments, the FDIC stated it had no comment.

When asked last week if Brooks’s letter indicated a change in U.S. monetary policy, the U.S. Treasury Department did not respond to our inquiry.

Brooks’s tenure has concluded. He resigned from his position this week with the change in administration, replaced by a career OCC employee, Blake Paulson, who may also be replaced in the coming weeks. This transition raises questions about the agency’s future approach to cryptocurrency.

Meanwhile, Gary Gensler, a former financial regulator and Goldman Sachs executive who has recently been teaching at M.I.T., is expected to be nominated to lead the SEC. He is anticipated to implement greater oversight of the $1 trillion cryptocurrency market than his predecessor, Jay Clayton, who stepped down from the role last month after three years.