Online student loan market LendEDU recently decided to analyze virtual currency-related consumer complaints filed with the U.S. Consumer Financial Protection Bureau (CFPB). It found that in 2017, these have surged by 5,971%, despite still being proportionally small compared to the total number of complaints the CFPB received.
In 2016, the CFPB reportedly received a total of seven cryptocurrency-related complaints. This year, the number may skyrocket to a projected 425. This, out of a total of 145,948 analyzed complaints made against 2,731 different companies. Notably, virtual currency transaction-related complaints account for 0.0019 percent of the total received by the CFPB.
The numbers remain minuscule and can easily be justified by cryptocurrencies’ growing popularity. Back in January, the cryptocurrency ecosystem’s total market cap was of about $17 billion. At press time, it’s of about $164 billion, according to CoinMarketCap. The huge user-influx cryptocurrency-related companies had to deal with inevitably led to verification and customer support difficulties.
Complaints against Coinbase increased 4,700%
LendEDU’s report highlighted digital currency wallet and exchange Coinbase. The company, a leading wallet provider, received a total of six complaints last year, while a total of 288 complaints have already been filed against it this year. According to LendEDU, it might receive as many as 442 complaints by the end of this year.
Coinbase’s struggling customer support is somewhat known, and the company has already pledged to use funds from a new funding round to boost its team and tackle the issue. At the time, the company stated:
“Over the past six months, Coinbase and GDAX have seen unprecedented growth. As a result, our systems have been pushed to the limit and [this] has resulted in a negative experience for customers”
According to its website, Coinbase has over 9.9 million customers. Given that it wasn’t able to deal with the unprecedented growth it faced this year, the company’s customer support Twitter page is filled with complaints, as users desperately seek answers to issues raised weeks ago.
Part of the problem, the report adds, is that regulators have enforced tight restrictions on companies like Coinbase, as they need to abide to AML/KYC regulations to prevent financial crimes.
In the report, Tyson Cross, an attorney and Bitcoin specialist, added:
“Regulators have forced exchanges, like Coinbase, to place tight restrictions and limits on users due to anti-money laundering concerns. Coinbase, and other exchanges, now require an in-depth verification process to withdraw money.”