PSA: Coinbase refuses to acknowledge fraudulent activities if it results in fees for Coinbase, will extort customers to repay them for fees generated illegally, & will do so while refusing to appropriately disclose fees included in repayments or provide services already paid for by Coinbase One subs

A few weeks ago my Coinbase account was compromised by fraudsters. The fraudsters purchased a large amount of BTC using my bank account, and were able to send about 25% of it out of my account before “Send” ability was frozen. They then converted this large amount BTC to other types of crypto (while attempting to send more out of my account), completing the following transactions within a couple hours:

Converted BTC to BCH Converted BCH back to BTC Converted BTC back to BCH Converted BCH back to BTC Converted BTC to USDC Converted USDC back to BTC Converted BTC to ETH

This behavior was clearly fraudulent, and resulted in almost $1,000 in “Coinbase Fees”. There is no reason any legitimate user of the platform would engage in this activity which ultimately just resulted in insane fees for a BTC -> ETH conversion.

My bank reversed the transaction, resulting in a negative balance, and I had to make a repayment to Coinbase to unlock my account. I am NOT currently disputing the full repayment, only the absurd $1,000 in fees generated as a result of the clearly fraudulent activity above.

Since then I have complied with all requests by Coinbase, including:

I reported the fraudulent activity as soon as I became aware (within a few hours) I promptly responded to Coinbase’s questionnaire, in which I listed all transactions which were fraudulent I submitted an approved police report with evidence to confirm these transactions occurred while my account was compromised

I have spent at least 8-10 hours on phone calls and answering emails from Coinbase support, and they have refused to answer my questions, simply providing links to vague “Help Center” materials, or copy-paste responses which are entirely irrelevant.

So far:

Coinbase has disclosed multiple times that they have the right to “refuse to process, or to cancel, correct, clawback, or reverse” fraudulent transactions, but have refused to make any adjustments to the fraudulent transactions on my account, presumably because they would rather extort me for the $1,000 in “Coinbase fees” I have documented email evidence (as well as call notes) proving that prior to making the payment to unfreeze my account, I asked Coinbase on multiple occasions to provide a statement disclosing what was included in the repayment (i.e. how much was to directly replace assets, fees, etc.). Coinbase support was only able to provide a standard transaction history, which did not disclose that I was repaying almost $1,000 in fees. I asked support how much I was repaying in fees, and they were unable to answer. Even after making the repayment, I have still not been provided with this documentation, and only figured this out in the first place through my own analysis of multiple transaction statements. This is in clear violation of CFPB regulations requiring companies to disclose fees included in ACH nonsufficient fee repayments. Despite the above, I ended up having no choice but to make the payment to unfreeze my account, because Coinbase removed my Coinbase One access, meaning I was unable to reach phone support. I was denied this service despite having already paid for my Coinbase One subscription through the end of June. This is a clear violation of consumer protection laws, as Coinbase refused to provide me with a service I had already paid for, while refusing to disclose what was included in the required payment to unfreeze my account (see above).

In short, Coinbase has refused to reverse known fraudulent activities on my account, despite having the ability to do so per their own terms of service, and having no ability to plausibly deny having knowledge that these transactions were fraudulent. They have violated consumer protection laws, by refusing to disclose that the payment required to unfreeze my account included fees. And they have knowingly refused to provide me with Coinbase One service I had already paid for, in order to extort me for these fees.

EDIT: On top of all this, Coinbase support just responded to my most recent email on the above with yet another copy-paste which answers none of my questions. Their customer support is either knowingly ignoring valid questions in order to avoid acknowledging fraud so that they can collect on fees, or are woefully incompetent. Either way, I highly recommend looking for other options. Even FTX reimbursed a friend of mine for fees when he had a similar situation happen….

submitted by /u/muu411
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