When bitcoin users want cash, they don’t want to wait very long for it.
Thousands of cryptocurrency holders have submitted complaints to the Consumer Financial Protection Bureau (CFPB) in the last nine months, an analysis by personal finance site ValuePenguin found — and the number of complaints skyrocketed when bitcoin BTC, +3.37% prices fell.
The biggest reason people made complaints, the number of which increased 669% between June 2017 and March 2018, was being unable to withdraw money from exchanges, said David Ascienzo, data scientist at ValuePenguin and author of the report.
Bitcoin’s prices have been volatile since it appeared in the late 2000s, hitting a maximum of $20,000 in mid-December 2017 and then falling swiftly to $14,000 by Christmas. Its value was around $8,000 on Wednesday. Exchanges struggled to keep up with customer support requests as people attempted to sell when prices fell.
Higher numbers of complaints, especially about major exchange Coinbase, started coming in as prices started to plummet and reached a climax during the week when the decline in bitcoin’s price was steepest. (Coinbase did not respond to request for comment.)
“I don’t think the price going as high as it did was expected,” Ascienzo told MarketWatch. “As it started to fall a lot of people wanted to cash out and cut their losses but this large increase of people trying to trade out at the same time caused a large transaction volume Coinbase wasn’t prepared for.”
Coinbase generally charges 4% for credit-card deposits, and similar fees for bank transfers. Users have complained the exchange does not have enough customer service representatives to meet customers’ needs. One user on Reddit complained that Coinbase overdrafted his account after a glitch caused $1,500 to be withdrawn rather than the $300 that he spent. Others have made similar complaints.
On March 1, Coinbase announced an “overhaul,” including hiring more customer support employees and increasing the infrastructure for transactions and paying taxes.