I’m know there are others out there on September 7th during the crypto market dip that missed out on trades due to Coinbase’s system failures. I’ve seen it on reddit, twitter and other social channels yet Coinbase has not taken responsibility.
Prior to this issue I’ve always been a Coinbase fan and started using it in late 2020. Never any issues, super easy to deposit money, low fees and all around I was very impressed. I’ve had thoughts about moving to a different exchange since this incident, but it’s a tough decision as not many others allow for the easy and low fee instant deposits.
On September 7th at 10:13am I placed a convert from USDC to QNT during the dip. It went through and said processing. It continued to process for a few hours and I just assumed it was due to the load on the servers and in time it would complete. A few hours later my entire account was frozen with a screen that said:
Payment Required We ran into a problem collecting funds for a recent purchase. Please complete this payment to restore your account.
Keep in mind I had more than enough USDC in my account already to cover any shifting in price so this is not valid. I then click to go ahead and make a payment though and I get this connection issue screen everytime, so no way to make a payment even if I wanted to:
I even attempted to do this on the desktop with the same issue, instead of getting the connection issue screen I just got a popup that said:
Your recent purchase failed Until resolved, your ability to trade and transact is disabled. After 5 days, we will automatically sell cryptocurrency in your account to collect any outstanding payments.
Again without any button or way to take any action to prevent this sale of my crypto in 5 days. At this point I started to panic so I opened up a support ticket with Coinbase at 12:30pm CST that day. I did not receive any response until 5:38pm CST. It was a generic response that didn’t make me feel any better:
Thanks for reaching out to us. Our team is currently reviewing your account to find the best solution. We will follow up with you on the original email thread as soon as we have an update.
Thank you for your patience.
No ETA or any additional information, but I figured I’d give it until the next morning to see what’s going on. The next morning 09/08/2021 after it had been 24 hours I replied again to the email for an update. I also went to Reddit and opened a thread on /r/Coinbase. On Reddit I found many others were affected by the outage as well and their accounts frozen. There was a moderator there copy and pasting a generic message as well:
Hi u/nrileykc – thanks for reaching out to us. Our teams are investigating into transactions scheduled during the service degradation yesterday that are not appearing in the account or are stuck in a pending state. We’ll post to our Twitter page with continued updates as they are available.
I then went to Twitter and found even more people having the same issue with little to no information from Coinbase on the situation. At one point they went 24 hours without even updating us. The communication breakdown here was unacceptable.
I emailed, posted on Reddit and Tweeted to Coinbase in hopes of some kind of escalation with the following:
The pending transaction I can deal with as I know it will take some investigation to resolve.
What’s is not acceptable is locking up my entire account and all other crypto assets and trading.
- You have not given an update on Twitter since 09/07/2021 @1pm CST
- The Coinbase status page doesn’t even acknowledge the issue at all
The communication, customer support, and how this is being handled overall is atrocious. There is no ETA or transparency. Locking my entire account is also very suspect.
Finally at 7:26am CST today (09/09/2021) I received an email response to my support ticket with the following:
Thanks for the response. We truly appreciate and acknowledge your time bringing this to our attention.
We’re pleased to report that this issue has now been resolved.
Please let me know if there’s anything else I can assist you with.
I went to Coinbase and saw the pending transactions were not gone completely, but my account was still unable to trade or transfer anything with the same warnings all over the place. I replied back letting them know it was not resolved and that I was upset that they cancelled the trade due to their failure in the system as it would have been a big profit on my end. There response came back within 2 hours:
Thank you for your response. We understand the importance of your conversion and let us help you sort this out.
Coinbase cancelled your recent cryptocurrency-conversion request due to price changes in the market which resulted in the quoted price being no longer available.
Coinbase has safeguards in place that prevent a conversion from losing value due to slippage. If orders were only allowed to fill at the exact price they were received, they would almost never fill because there’s a high probability that the value of the cryptocurrency will change between order listed and order received.
Coinbase applies a Spread of up to 200 basis points (2.00%) for Digital Currency Conversions. If the slippage on your conversion were to exceed the spread, we cancel the conversion.
If you would like to try this transaction again, you might want to use smaller amounts as smaller transactions are more likely to fill.
Please note, in times of extreme volatility, the quoted price may fluctuate drastically such that your order can’t be executed.
Please let us know if there’s anything else we can assist you with.
Then about 20 minutes later I received another email:
Funds recovery complete
We have successfully collected the funds from your recent failed transfer. However, there may still be restrictions on your account.
At this point when logging into Coinbase my account was back to normal and able to trade/transfer again, but the coins I attempted to purchase during the dip did not go through. I still say that is on Coinbase and they should have honored it. Coinbase didn’t even add this issue to their status page to acknowledge it, almost like they were trying to minimize the impact. KuCoin at least made an announcement, took responsibility and working to get users their funds as they placed the orders.
At this point I’m still not sure what I’ll do as far as changing exchanges. If any other out there make depositing money instant and cheap from your bank account I may make the switch in the future.