US-based crypto exchange Coinbase is facing criticism from the crypto community over its handling of customers’ transactions. The criticisms came after a Coinbase user Holaivory, complained that she lost a few thousand in Tether stablecoin after sending USDT to Coinbase on the Arbitrum network.
The post has generated multiple comments from other customers claiming they had similar experiences when they sent funds to the wrong networks on Coinbase. They noted that the exchange has poor support service and profits from its customers’ mistakes.
Customers share stories of losing funds on Coinbase
According to Holaivory, she had previously sent USDT via the Arbitrum network without any issues. However, her most recent transaction encountered problems, as she did not receive her funds after an hour.
She claimed the first Coinbase agent she contacted said it was a regular delay. After speaking with three Coinbase agents, she discovered that the exchange does not support USDT transfers via Arbitrum.
Since sharing her story, many others have also detailed their experience with Coinbase and other centralized exchanges on X. Most say they could not recover these funds sent to the wrong network despite contacting the exchange support. One user noted that incidents such as this make it impossible for crypto to replace the traditional financial system.
Holaivory pointed out that Coinbase may be holding millions of user funds due to this mistake and has refused to return them when it can easily do so.
She said:
“Coinbase is holding millions of dollars worth of assets from people who have made this mistake and claim that there is nothing they can do, even though they hold the private keys to the wallets containing these assets.”
However, Coinbase has insisted it does not support USDT on the Arbitrum network. In a post by Coinbase support, the exchange acknowledged that it could be frustrating, but it does not have the ability to recover the funds.
Crypto users have disputed this claim, saying that Coinbase would have private keys to the wallet holding the funds. Thus, returning the funds should not be a complicated process for the exchange, even though it might require manual recovery.
Call grow for Coinbase to develop a comprehensive recovery tool
With the prevalence of this issue, industry stakeholders and community members have called on Coinbase to develop a solution. Crypto investor Adam Cochran called on Coinbase to find a solution, noting that it is not unsolvable. In a post tagging Coinbase COO Emilie Choi, He said that technical support staff should be needed to help users in such cases.
Meanwhile, crypto key opinion leader Karbon believes Coinbase should already have a comprehensive asset recovery tool for users who make this mistake. He noted that the tool would be great for customer service and added that crypto platforms must plan for users without technical experience.
He said, “It’s user error but it really shouldn’t go down like this. Crypto platforms need to plan for the least technical savvy users and an issue like this is predictable and easily solvable.”
Interestingly, Coinbase already has a tool for recovering lost assets and collects a percentage of recovered funds as fees. However, most users are unaware of the tool, and it does not cover many assets and networks, making it less effective.
Source: https://www.cryptopolitan.com/coinbase-under-fire-over-users-lost-fund/