LOS ANGELES – After thousands of customer service complaints, Coinbase has launched a new live phone support line. But many customers are frustrated after the company’s recent attempts to address concerns.
Take Eric and Molly Richardson, for example.
The SMS on Eric’s phone scared him so much that he went to the side of the road. It was a sunny day in July.
The retired lawyer clicked on the message that someone had logged into his account. He logged in and soon received an email informing him that his two-factor authentication had been changed, meaning his security settings may have been compromised.
Then the horror got worse.
He and his wife, Molly, have saved nearly $ 1.2 million in cryptocurrencies. Suddenly, the fraudster began to withdraw all the money he had invested in bitcoins, about $ 700,000, as Eric observed. And there was nothing he could do.
“I panicked. I haven’t had that feeling in a long time,” Eric said, acknowledging that the SMS was a phishing attack to get his credentials.
Coinbase customers lost about $ 700,000 in cryptocurrencies when their account was seized by a fraudster, Eric and Molly Richardson.
Richardsons was unable to call Coinbase for help because when the account was made in July, the company only provided help via email. An investigation in August found that the accounts of thousands of customers had been compromised and they had been hanged by the company. Coinbase, which went on sale in April, has a market cap of more than $ 50 billion.
Since 2016, users have filed more than 12,000 complaints with Coinbase about the Federal Trade Commission, the Bureau of Consumer Protection and Better Business Bureau, mainly related to customer service. An additional 1,500 complaints have been received since August.
Other cryptocurrency exchanges have faced similar complaints, but less so than Coinbase, the largest exchange in the United States.
Coinbase set up a live support line in August in response to criticism that customers can’t talk to anyone at the company. However, dozens of customers whose accounts were compromised and deleted called for help, which did not lead to a solution to their problems.
In the case of the Richardsons, Eric said it took fraudsters just 20 minutes to remove 21 Bitcoins in 110 different transactions.
Eric reported the theft to Coinbase, which closed the account. But he said for more than two months, no one had helped the couple return their money or open an account.
“I still don’t know how it happened,” he said.
In September, Richardsons called Coinbase a new phone support line. The agent told Eric that he had no access to the case materials and offered to respond to a recent email from Coinbase. The 10-minute call ended with more disappointment, not a decision.
“It was a joke; it made me a little angry. No one can make a decision on customer service,” Eric said. “They just can’t help much. Do you know what Coinbase did two days after I was hacked? They sent me a customer request and they asked me to rate their services.”
Coinbase customers across the country have reported similar incidents since the start of live phone support.
For example, customer Mark Bulos said in an email that “live support is only for active locked accounts; my account is no longer locked, so I can’t access the live support service even if I try.”
“The system recognizes that the account associated with my phone number is not locked and does not allow access to the live support service,” Boulos wrote.
Another customer, Don Pirtl, called the phone line a “joke”.
After failing to restore access to their account, customer Konrad Yi said, “They seem to have failed in every department.”
A Coinbase spokesman said the company will “provide global phone support for all customers and live messaging by the end of the year. Our goal is to be the most reliable and easy-to-use platform in the crypto economy, but we recognize that some of the challenges our customers face with their Coinbase accounts. Improving the customer experience remains a priority. “
“In most cases, Coinbase will not cover damages resulting from unauthorized access to Coinbase accounts due to a breach,” the statement said.
Earlier this month, in a letter to Coinbase customers, the company revealed that the funds of nearly 6,000 customers had been stolen in a phishing attack between March and May 20. The hackers “took advantage of a flaw in the Coinbase SMS account recovery process. Get an SMS two-factor authentication token and order to access your account.”
A company spokesman said: “We immediately rectified the flaw and gained control of their accounts with these customers and recovered the lost funds. These large-scale, complex phishing attacks are on the rise and we recommend them to everyone. . uses online financial services to be vigilant and take the necessary steps to protect their online identities. ”
When asked about the security of Coinbase accounts, the spokesman said: “Unfortunately, although some Coinbase customers have fallen victim to phishing attacks and account seizures, the attackers have never compromised the Coinbase security infrastructure.”
Experts point out that there are alternative ways to store cryptocurrencies that are largely protected from breaches.
An effort to help protect Richardsons and others is to keep cryptocurrency cold on the stock market like Coinbase or switch cryptocurrency to offline mode.
“I beat myself up every day because I have the voice of my friends in my head.” Eric, put it in the fridge. ”And I didn’t,” Eric said.
Nicole DeCicco, who helps customers protect their cryptocurrencies through CryptoConsultz, says cold storage is virtually unbreakable. Crypto owners get a password-like private key to store this key offline.
“A cold storage or cold wallet is completely disconnected from the Internet. It’s a device that sometimes connects to your computer,” he says. “If you keep your money in the fridge, those funds will belong to you. They’re offline, away from hackers.”
Nicole DeCicco helps clients protect their cryptocurrencies through CryptoConsultz.
“I want to tell my customers that you can always load money from a cold wallet into a hot wallet as you withdraw money with your ATM card. But if we’re talking about a large amount of money, it’s the best practice. It should be stored in the refrigerator,” he said.
DeCicco says it’s easy to open exchange accounts, but setting up cold storage requires more work. Many investors buy a device for this purpose to install a cold storage. It should then be loaded with a private key and stored securely, for example, in a warehouse.
While cold storage is safer, it has its own set of problems. Owners may lose passwords or the device may be compromised.
Richardsons said access to their account was eventually restored after more email exchanges with Coinbase. And the company sent them the money back.
But this did not happen as they expected. The company put $ 500 Bitcoin in its account.
“They look like they’re sanding my face,” Eric Richardson said. “Are there even older seniors at Coinbase, look at it? Someone wrote an account and said, ‘OK, that’s what happened to this guy.’ He lost 21 bitcoins. Let’s give him $ 500, “he said.
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– of Angelica Serrano-Roman and Nadin al-Bawab contributed to this report.