Recently, there have been reports by many Coinbase customers about some unusual transactions taking place on their accounts. Some of these unauthorized transactions were so extreme that it depleted the users’ bank accounts, resulting in hefty overdraft fees.
For the past few days, the Coinbase subreddit has been filled with threads like these:
These were the complaints by the customers of Coinbase, who have been facing pressing issues such as missing wires, unreleased bitcoin, and disabled accounts.
“My bank account went from very comfortable to negatives balance, not to mention extra $5 charges, and overdraft fees,” one user wrote. “As a result my rent check bounced, and my bank went further into negative for a NSF charge for $25. My landlord is not a nice person and is on my CASE and I have nothing to offer him. I am FREAKING OUT.”
This issue came right after Coinbase launched their new platform called “Coinbase Commerce”, a new service that enables merchants to accept multiple cryptocurrencies directly into a user-controlled wallet.
When reached out to get some further information about the fiasco, a representative for Coinbase, Stephanie Kendall, said the company was unable to comment on the complaints.
Why This Happened?
Throughout the last year, the demand for cryptocurrency exchange platforms has increased exponentially along with the price of cryptocurrencies themselves. Kraken, the third-largest exchange in the world, suffered an outage earlier this year that was supposed to take two hours but ended up lasting two days as it upgraded its system.
Thus, as Coinbase adds more and more users to its platform, there is an increasingly higher chance for glitches to happen:
— Alistair Milne (@alistairmilne) November 2, 2017
Today, Coinbase came out with a statement clarifying this issue. According to Coinbase, the issue was a problem related to their credit card processing rails, and can be traced back to Visa. Specifically, it’s the result of Visa reversing and recharging past charges in wake of a decision to classify Coinbase transactions as “cash advances”. Though phone class he users could today without warning Visa (but not MasterCard or any other card network) reversed and recharged some transactions that occurred between January 22nd and February 11th, in order to classify them under the new MCC.
Referenced Article(s): TechCrunch