As the price of bitcoin has fallen, a well-known cryptocurrency has seen customer complaints jump, according to a research report on the prominent digital-asset platform.
The report comes from financial analysis firm Value Penguin which studied complaints received by the Consumer Financial Protection Bureau over issues related to San Francisco-based crypto exchange, Coinbase.
“Higher numbers of complaints rolled in just as prices started crashing, reaching a climax during the week of sharpest descent,” said Dr. David Ascienzo, data scientist at Value Penguin.
“Even then, BTC prices didn’t fall anywhere near where they were in the earlier half of 2017, but the data show an array of negative experiences for consumers struggling to manage their coins when it mattered the most.”
The findings underpin a common criticism of digital-currency exchanges: they cannot handle transaction volume. Some exchanges simply freeze or fail when volatility and transaction numbers increase.
On Feb. 14, the intraday range for the No. 1 digital currency, bitcoin
was more than 11%, which caused one exchange, Binance, to encounter technical glitches.
This wasn’t an isolated incident for Binance. On March 7, another day with a range in excess of more than 10%, the site crashed and users weren’t able to withdraw funds and some even experienced account activity they did nor permit.
Read: Bitcoin exchange Coinbase is handing over user information to the IRS
As for the Coinbase complaints, users voiced concerns over their inability to access funds at a time they were promised they could. Of the 2,271 consumer complaints gathered, 40% were for unavailable funds, 20.5% for other transaction problems and 11.7% were to do with “fraud or scam.”
The complaints intensified toward the end of 2017 and into the early stages of 2018, which is when the price of bitcoin peaked, then proceeded to lose close to half its. According to the report, customers experienced transfer delays between Dec. 15, 2017 and Jan. 13, 2018, and from Jan. 4 to Jan. 9, the CFPB received 358 complaints, the majority concerning transaction delays.
“It has been eight days since my $1000 deposit has been withdrawn from my checking account, but it [was] never confirmed by Coinbase. Coinbase simply stole $1000 from me,” a customer told the CFPB.
Coinbase didn’t answer any questions regarding the report but did direct MarketWatch to their support page.
Complaints were retrieved from the CFPB’s consumer-complaint database and bitcoins historical prices were retrieved from Coinmarketcap.com. The CFPB’s database is updated frequently and all information used in this study is based on data which were retrieved on March 12, 2018 at 9:40 a.m. Of the 2,271 complaints Value Penguin examined between June 1, 2017 and March 1, 2018, only 42.9% of them had provided consumer-complaint narratives at the time of acquisition.