The r/Coinbase subreddit has been flooded with customers complaining about Coinbase:
- Taking money out of their bank accounts via debit (see comments here). Adding insult to injury, users are furious at overdraft fees charged by their bank and not being able to pay rent.
- Not crediting funds deposited via wire transfer (example)
- Not being able to transfer assets out of Coinbase (search this thread for “wallet” or “withdrawal”; or see Twitter)
The problem I see is that draining bank accounts is not a viable business model. Those transactions will be reversed. Eventually, Coinbase will be cut off from accepting credit cards and debit cards because nobody will want to pay for the customer service and fraud investigation costs that erroneous transactions generate. It is clearly unsustainable. To be fair, this might simply be a case of buggy software causing the erroneous transactions. Anti-fraud practices and growing pains might explain some of Coinbase’s other issues. However, the inappropriate transactions don’t look like the work of shoddy IT. So here’s my crazy theory: one of the world’s most popular and reputable exchanges is borrowing money from consumers (without their permission) to stave off a liquidity crisis. I can’t definitively prove this so you’re going to have to look at the evidence and make up your own mind.
