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Brian from Coinbase here. Sorry for the delay on that - definitely not the customer experience we are striving for. We should have things squared away for you

Brian from Coinbase here. Sorry for the delay on that - definitely not the customer experience we are striving for. We should have things squared away for you by end of day. Edit: your bitcoin credit has now been processed. It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. We should have certainly caught it and responded sooner so that was our fault. My deepest apologies for the delay and trouble on that. We've credited $50 worth of bitcoin to your account for the trouble, as a small way of saying thank you for bearing with us. Edit2: we'll push through the bitcoin credit at today's price instead of the original buy price (which should be in your favor) since the mistake was on our part. Sorry again for the trouble!

bonemachine 13y ago
If in fact there's been no fault on the customer side, then obviously he deserves not only a (profuse) apology -- but fair restitution for any losses suffered while your people were dithering on how to follow up to his perfectly reasonable request. BTW in equities trading I believe this kind of botched transaction would be treaated as a "Failed to Deliver" (FTD), and that's exactly how these things are handled.
- CyrusL 13y ago
  Coinbase is not an exchange like Bitstamp or Mt.Gox. This fact is not just something buried in their T&C. Their company communication has never described their product as a tool for day-trading. They made a promise to deliver bitcoins at a certain price and on a certain date. The original poster's issue is equivalent to Amazon promising 2 day shipping but the book came a few days late.
  - gst 13y ago
    So with Amazon I'd just return the product if it arrives too late. Does this work with Coinbase too?
  - gamblor956 13y ago
    No, it's nothing like shipping a book 2 days late. The OP has actual, recognizable economic losses as a result of Coinbase's delay. The transfer of money via ACH is a separate transaction from the Bitcoin acquisition. After the admitted delay following the Bitcoin acquisition transaction, Coinbase should have either reaffirmed that the OP wanted to purchase the coins at the original price, canceled the transaction, or acquired the coins at the then-market price. (Note, normally when the price increases, Coinbase cancels the transaction.) Consequently, the OP has a solid legal case against Coinbase. Unfortunately, for the amounts involved its borderline not worth pursuing. It's too large an amount for most small claims courts, and too small an amount to justify the time and cost of civil litigation (unless it settles at the very early stages). Indeed, based on Coinbase's record (refunding purchases if BC prices increase rather than executing the transaction), it's very likely that they are factoring this arbitrage into their business model.
    - hnha 13y ago
      It is pretty much like that if you buy a book to gamble with its resale value.
      - deleted 13y ago
        [deleted]
      - r00fus 13y ago
        That's not the primary intention of the book - the book has intrinsic value that BTC do not. The value of BTC lies predominantly in the market value. So the book analogy is ridiculous and patronizing.
    - jeremyrwelch 13y ago
      OP has no economic loss as a result of Coinbase's delay. OP has a loss as a result of Bitcoin price changes independent of this error.
      - FireBeyond 13y ago
        Which could have been mitigated -had Coinbase fulfilled their delivery, as negotiated-. Ergo, material losses.
  - apalmer 13y ago
    The key here is the promise to deliver bitcoins at a certain price at a certain date. If they indeed promised to deliver on a certain date then clearly they are in violation... not sure if they really did make that promise though
  - tedunangst 13y ago
    It's somewhere between Amazon delivering your book the day after Christmas and TicketMaster delivering your ticket the day after the concert.
  - PeterisP 13y ago
    If I order a $30000 shipment of fish and you deliver them 2 days late, I have all legal rights to refuse the shipment and require the full amount back + my losses or lost profit (in the amount I can prove in court) for not having the fish back when you agreed to deliver them. You don't need to be called an exchange or sell currencies in order to be financially liable for delays; and the more perishable/volatile the product is, the larger the possible liabilities.
eof 13y ago
again, the best way to get support from coinbase is posting on public forums. i love coinbase, i think guys have done and will continue to do amazing things for bitcoin, and by proxy the world at large.. but your initial customer support is outrageously terrible and has been for way too long. you always seem to make it right in the end.. but you should hire about a dozen of the ten thousand kids that would love be on your support team
- hack_edu 13y ago
  After the 25mil from a16z, I doubt these problems will continue for much longer.
  - bsiddiqui 13y ago
    you shouldn't have to raise money to provide solid service
    - lsc 13y ago
      >you shouldn't have to raise money to provide solid service I agree... but being a market maker is one of those things that requires some reserves, and especially the early exchanges? when bitcoin was under a buck, I can totally see getting together with a couple friends and putting $20-$30K in the reserve pot and giving it a go. But with bitcoin appreciating 1000x? yeah, uh, that got serious fast. Thirty grand is no longer anywhere near a reasonable amount of operational reserves
- fragsworth 13y ago
  If only Mt. Gox were as responsive. I haven't been able to pull my bitcoins out of there for a month now, because they still haven't verified me. Add to that the fact that their fucking site LIES TO YOU about how you can withdraw 100 bitcoins per day, and then surprises you with how you can't actually withdraw any until you get verified first.
- kudu 13y ago
  It's worrisome that you have to basically complain on a public forum in order to get a reaction from them.
onedev 13y ago
Make sure you give him the new price.
- quannabe 13y ago
  I don't think you quite understand how Coinbase works. Since most transactions are ACH (and reversible) they take ~5 days before the coins are available. This is disclosed up front, and again when you purchase bitcoins.
- bct 13y ago
  quannabe: You have been hellbanned since your second comment.
abijlani 13y ago
I've had a terrible customer service experience with Coinbase too: http://amit.roon.io/an-open-letter-to-coinbase http://amit.roon.io/an-open-letter-to-coinbase
- anoncowherd 13y ago
  Funny how whenever a company gets enough bad publicity to actually hurt their bottom line, suddenly their customer service runs a bit smoother.
laudenum 13y ago
Why did it take a public complaint to get you to do your job? Did you process the transaction using the current exchange rate or the December 8th rate? If its the latter why would anyone use your service?
sergiotapia 13y ago
Did you credit his account using the rate of the day he purchased his coins in? If not that's unnacceptable. Why would anyone use your sevice? Why does it take a public shaming for you to do your job?
- deleted 13y ago
  [deleted]
  - FireBeyond 13y ago
    You seem quite the apologist: "To not expect some errors from a startup with an emerging technology is just silly. Users should expect some errors, and expect fixes to those errors by Coinbase as properly happened in this case." Huh? A startup dealing in financial instruments doesn't just get to say "Startup!" "1.0!" "Beta!" or "MVP!" and wash its hands of responsibility. If I do $10,000 worth of damage to your car due to my (in-)action, and throw $50 at you "by way of apologizing", your losses are somehow mitigated?
    - jeremyrwelch 13y ago
      I never advocated that they could wash their hands of responsibility. My statement was that any users of a startup should understand that there are risks that come with using any new service/technology/etc. That's not to absolve a new company of their responsibility, it's just prudent business sense from a user perspective. I just think that too much blame is being put on Coinbase. There is anger at the delay mixed with anger from the price swing, and too much is being directed at Coinbase.
      - jessaustin 13y ago
        You may not have intended this, but your posts on this thread have convinced me that Coinbase should not be held responsible for their own errors that hurt their customers. Now, care to take a guess at whether I'll ever be a customer?
ivanplenty 13y ago
The server upgrade bug: 1. How many other customers were affected by the server upgrade? 2. Why was this not caught at the time or after? The customer response bug 1. What steps are you taking to correct the issue it took a front-page HN story to get traction? 2. Will you commit to writing a post-mortem blog post? If you don't learn from your mistakes, then you are deeply doomed. I don't want you to be doomed :)
- towski 13y ago
  Welcome to the wild west
- ziyan 13y ago
  In my case, the buy was initiated on Dec 7, 2013, ACH cleared on Dec 11, 2013, bitcoin credited today Dec 18, 2013.
kenna 13y ago
because of your delay, he lost $13226.98 at current market rate: http://www.wickedfire.com/shooting-shit/177828-where-my-bitcoins-coinbase-shapow-3.html#post2144449 http://www.wickedfire.com/shooting-shit/177828-where-my-bitc... I hardly think $50 is going to make him feel happy.
- ChrisClark 13y ago
  And because of their delays, many others have made money on the transaction. They pay out at the market price of when the order was placed. The OP thought it was worth it then, and bought them then.
  - gamblor956 13y ago
    What you seem to be missing is that the OP tried to buy them then, Coinbase did not process the transaction in a timely manner, and subsequently bought the coins for the OP today after the OP's post at the original price, having already breached the purchase agreement. This is a pretty close to being a classic contract law case, except with bitcoins rather than tangible goods. If this goes to trial, the outcome is not likely to be favorable to Coinbase.
  - jules 13y ago
    He may not have held on to them, which he was forced to due to the delay.
  - tedunangst 13y ago
    At any time between then and now, the OP could have realized his mistake and sold the bitcoins for a lesser loss had they been in possession of the bitcoins.
    - ChrisClark 13y ago
      Coinbase is not for trading though. He should have purchased on an exchange then.
      - 13y ago
iblaine 13y ago
As a data warehouse engineer, I feel the frustration here. d'oh.
kjackson2012 13y ago
Hopefully you are selling him the BTC at today's rate, and not at $868. This post is an admission of guilt on your part, so if you don't, he likely has a great case when he sues you (which I would, if I suffered a $12k loss like he just did).
- asperous 13y ago
  He only suffers a loss if he sells. I'm bearish, but it's too soon to say that it's never going back up to 800.
  - FireBeyond 13y ago
    ... which he could have minimized if he had access to the coin when promised.
- jeremyrwelch 13y ago
  Don't be silly. He suffered a $12k loss because of price fluctuations most likely tied to People's Bank of China news, not because of Coinbase's error. There are no grounds for a lawsuit here.
  - kudu 13y ago
    What are you talking about? He could have sold them on December 13 if he had gotten them at that time.
- ameister14 13y ago
  Yeah, only if he can make the case that he would have sold or used the bitcoins prior to the new valuation, and only if you don't treat it as a currency.
- patmcc 13y ago
  Was the delivery date of the BTC ever set? They guaranteed a price and delivered on it (yes, they took a while, yes the value went down in the meantime). If the price went up, everyone would certainly expect them to deliver at the guaranteed price and not the current one. What they probably should have done is just reversed the transaction entirely, but if I was deciding this, barring some agreement on delivery time, Coinbase would be mostly blameless.
bonemachine 13y ago
Lemme get this straight, Brian: Rather than refunding the dollar value ($35,104.11) of the original, clearly botched transaction, you ended up giving him the 40 BTC at their current trading value (about $560), that is, for net a loss of $35,104 - $22,400 = $12,704? And you think $50 plus a thank-you note(!) is enough to make him whole on this loss?
- makomk 13y ago
  Don't worry, based on their past behaviour I'm pretty sure they'd have managed to refund him the dollar value if the price of Bitcoin skyrocketed.
  - EGreg 13y ago
    Funny dynamics for bitcoin to be used as a currency For now its swings are like the Zimbabwe dollar
    - deleted 13y ago
      [deleted]
    - AnneOminous 13y ago
      This isn't a failure of Bitcoin. It's a failure of the market. Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. Current market price has been very far from that. Bitcoin market right now is pretty much the definition of a bubble. Beware. In a "bubble" market, your money can disappear overnight. But again: that's not Bitcoin's fault. It's the fault of idiots vastly and irrationally driving up market prices. This is really a textbook lesson in why Wall Street does not represent the "real" exonomy.
      - dragonwriter 13y ago
        > Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. The current cost of mining is a rough replacement cost of bitcoin (and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying), but since mining isn't inherently reversible its not an intrinsic value.
prawn 13y ago
I laughed at $50!
deleted 13y ago
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bdesimone 13y ago
Skettios. What is coinbase doing to prevent this from happening in the future? Both from a customer service perspective, and from a technical one. I want to assume good faith, but I'd also like to verify before doing business with you.
seldo 13y ago
Forget the difference in the exchange rates. Are you saying you have no system in place to monitor if transactions execute successfully? I'm not trying to be hyperbolic but that's really shocking for a company that is trying to play a role as a financial institution.
- slg 13y ago
  >that's really shocking for a company that is trying to play a role as a financial institution. That is probably the scariest part about the current Bitcoin community. Many of the big names are simply "playing a role". We have no idea of their technical expertise, the viability of their software, their USD/Bitcoin reserves, how they plan to address disputes like this, or even whether they are skimming of the top.
  - revelation 13y ago
    And a majority of the (previous) big players have been compromised on more than one occasion. It's a big kindergarden.
    - deleted 13y ago
      [deleted]
  - seldo 13y ago
    I mean, MtGox stands for "Magic The Gathering Online Exchange". They were literally set up to sell trading cards. The whole "being the biggest bank in a new $6bn+ economy" is a pivot. The whole system is crazy. But even by those standards, taking 35 grand and not noticing you didn't give them what they paid for stands out.
    - tedunangst 13y ago
      But even by those standards, taking 35 grand and not noticing you didn't give them what they paid for stands out. That's really the weird part. This is a business that does money in, money out. They should be balancing the books and checking inventory every day. It can take Amazon a while to realize a mistake because it takes time for somebody to go around the warehouse and count all the boxes to discover they're holding excess inventory. But how long does it take for Coinbase to compare the number in column A to the number in column B?
bushido 13y ago
Yikes! Please tell me you consulted with a lawyer before posting this publicly? Even if you gave the OP the BTC at current rates SEC/Courts can make a case against this sequence of events. It does not even have to be reported. I have nothing against you or Coinbase and I do sincerely hope I am wrong. This can have dire consequences on your current and future business(es). It would have been best to refund the withdrawal in its entirety or just credited it, to be used for a future transaction as that would have saved you guys from a world of pain. For any other service I would have given you Kudos for acting, albeit slowly, and applauded honesty(though not so much due to blaming it on the servers, which in a financial context is unacceptable). But for a business that a court can deem/classify as a financial institution (regardless if you consider yourself one), this could be considered as a admittance of wrong doing. edit: grammar
- joonix 13y ago
  Coinbase is not a bank. Or a financial institution. If it were, it'd have a charter and licenses. It's a merchant just like any other. You give them money in exchange for goods. No different than iTunes.
  - bushido 13y ago
    It does not need to be licensed as a financial institution to be deemed as one. The courts can and will deem them that the company is subject to some of the rules and regulations governing the financial industry and up the charges against them when this enforced. I am purposely not saying 'if'. Because there is no possibility of this not being brought to a judge on the behest of SEC themselves or a consumer complaint. In layman terms: (1)they buy and sell BTC on behalf of clients and charge the client for the transaction including their fees. (2)they are an online payment processor of sorts. They will need to follow more regulations than Paypal, as paypal is also a digital wallet of sorts, but while it provides a conversion, they technically do not trade(buy/sell currencies) on behalf of clients.
    - blantonl 13y ago
      Bitcoin is not an official currency in the eyes of the law. Therefore, there are almost zero regulations that would apply to Bitcoin transactions, other than contract law.
1945 13y ago
In other words, Coinbase is going to supplement ~$13,950 loss with $50.
- jlas 13y ago
  In other words, Coinbase just pocketed his loss. (Assuming the transaction was made today.)
  - LandoCalrissian 13y ago
    That would be my impression, and that's really shady.
    - alttab 13y ago
      This, including the XSS comment elsewhere in this thread has prompted me to move my coins ASAP. Coinbase US understaffed, running fast and loose, and can't handle the spike in attention. This proves bitcoin isn't ready. Coinbase has a long road ahead of it.
dkersten 13y ago
If this is the case, why didn't you respond to the emails?
downandout 13y ago
I do hope that, at the very least, you will not make him pay the "locked in" price for a delay that is your fault. There are many threads on bitcointalk.org suggesting that these delays only happen when the BTC price is very volatile, and that once they are resolved, the actions taken by Coinbase (either cancellation of the order or delivery at a locked in price) always inure to the financial benefit of Coinbase. I am certain that the Coinbase TOS allow significant discretion as to the timing and cancellation of orders. However, systematically delaying orders and then cancelling or forcing people to buy based upon which will be most profitable for Coinbase, which seems to be occurring, could certainly be construed as fraud.
bdesimone 13y ago
Edit2 = Damage control.
deleted 13y ago
[deleted]
Udo 13y ago
Offering restitution after a customer went to the media is not enough. If this is a systemic problem (and indications are: it is), you have to take steps to avoid these scenarios in the future. Having a customer service that actually responds to issues meaningfully would be a first step, but that's only the beginning. There's a technological solution to this. If you know that for whatever reason some transactions might never complete on your end, one of several obvious solutions would be to introduce a timeout after which the transaction is rolled back automatically. That means introducing a batch process to at least trigger a manual review of these cases, and possibly even an automated cancellation with repayment. Doing that within a business day of receiving the money wouldn't be out of order, maybe even make it an hour or so (this is supposed to be a fast medium, right?)
anoncowherd 13y ago
>> It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal Oh? Did that also cause some kind of downtime in your customer service operations, considering you sure took your sweet time in getting back to him? Funny how the front page of Hacker News makes things run a bit smoother, huh?
philfreo 13y ago
Off-topic, but since you guys have ignored: 3 emails from me, and a tweet... I sent you an XSS vulnerability to whitehat@coinbase.com according to https://coinbase.com/whitehat https://coinbase.com/whitehat almost 3 weeks ago and haven't received so much as a confirmation "thanks we are looking into it" email from you guys.
- tnorthcutt 13y ago
  To anyone considering or currently using coinbase: this comment (if verifiably true) should be a GIANT red flashing light warning you to tread carefully.
- alttab 13y ago
  This scares me.
  - nanidin 13y ago
    Enable 2 factor authentication. IIRC Coinbase doesn't use it per user action, but at least having it has the potential to save you some headaches.
- borski 13y ago
  Coinbase guys: if you'd like, we're happy to offer you a free 3 months of website vulnerability scanning to hopefully help you find and squash any vulnerabilities like this. Just email me at borski@tinfoilsecurity.com.
- philfreo 13y ago
  It was frustrating that I didn't receive any contact from Coinbase until after posting on here HN, however I'd like to point out a couple things: - This was a relatively minor XSS vulnerability which required a bit of social engineering to pull off, rather than being a traditional XSS that most HN readers would need to worry about. - Their delayed response was likely due to the relative minor nature of this vulnerability. - I still feel safe using Coinbase - They're taking care of it and treating me well :)
- barmstrong 13y ago
ErikRogneby 13y ago
+1 for owning up that this was a bad customer experience. -1 for the cavalier, "looks like were were performing server upgrades last week..." That is a startup excuse. I'd love to hear Chase Bank use this excuse and see how that flies with banking regulators.
ziyan 13y ago
One of my buy order also experienced the exact same issue. It was placed on Dec 7, 2013, and it was supposed to credit last week as well. The ACH (A1TBCFQ3) was cleared on Dec 11, 2013, and the bitcoin (11UARZ7A) was just released today. Apparently, My transaction was lucky enough to be in one of your "handful" lost jobs. The worst thing is, during this whole time, my support ticket was never answered and is still unanswered. There is no indication that it has ever been read by a human. Since you admitted to guilt, I shall be entitled to the bitcoin credit at today's price as well.
zallarak 13y ago
I understand that you guys have a ton of work going on, but if you are charging for a service you need to deliver and respond to your customers on time before they feel the need to go public. I started my career as a "customer service superhero" at ZeroCater and was the only employee for a while. There was a staggering amount of work to be done at times, most of it non-customer service related. I'd never leave without making sure every customer email was addressed - and this was a much more trivial issue (lunches). This is not just human decency, but its good business practice. I wanted to speculate (yeah it's speculation :P) on bitcoin using your service, but no longer will, and will no longer refer your service to others (unless something changes, of course). It is not a question of ethics, but a question of me making a good decision - why would I trust my money with a business that doesn't feel the need to address customers on time (especially those who trust them with significant sums of money) This issue would have cost you a maximum of 2 hours of free time/sleep to fix - now its costing you a customer (I'm sure the cost is actually far greater, judging by the exposure of this thread). Was it worth it?
sjp 13y ago
Bravo Brian re edit#2 - there may be hope for some customer service after all! Is it too much to assume that you will be pushing through the bitcoin credit at today's price instead of the original buy price for all those affected by your "mistake" (your words). I too have had the same problem - albeit on a smaller scale.
kordless 13y ago
Hey Brian. Appreciate your response and explanation. When you come up for air, would love to see a blog post about the issue and some thoughts on monitoring for such failures. I've run into this type of problem before in architecture.
simonebrunozzi 13y ago
Quick comment on Edit2: very nice of Coinbase to do this; and I can be almost certain that it would NEVER happen with a normal bank. Brian, well played. Keep up the good work.
functional_test 13y ago
You can't possibly be serious. You pocketed his ~$12K loss and you're giving him a $50 credit? Are you high? Sloppiness like this wouldn't fly in actual finance. It would get you fined and possibly more. Lacking any sort of internal controls, even something as simple as balancing your books and verifying all transactions... It's shocking and negligent. Even more so for a YC company. Shame on you.
dangero 13y ago
Wow now I'm pissed. I had the same issue but didn't make a public stink about it. Just got my coins today with no credit for the mistake and the same issue of my coins being frozen at a higher price. Looks like I should have been more rude about it. Not only that, but I was told that my coins could not be released earlier because "they needed to be removed from cold storage". So now we have 2 different excuses for failures in the same time period. The cold storage excuse seemed completely bogus to me too because we're talking about crediting a number to my account, not getting actual Bitcoins. They don't become Bitcoins till I send them out of Coinbase.
- saraid216 13y ago
  I support filling the HN front page with stories like this. Especially if it means that you get your money back.
- mgrunin 13y ago
  Make a public stint about it if the issue isn't resolved accordingly. There is no reason to pay the price for a mistake by their company.
Zarathust 13y ago
So you've screwed him out of 13 000$, but gave him back 50$? That is ADORABLE.
barrkel 13y ago
You need to have at least one person in charge of reconciliation. If you're not running recs with data feeds from the various parts of your system doing transactions, you're just a lawsuit waiting to happen. If you were an actual regulated financial entity, not running recs would be illegal under risk management requirements.
cmsmith 13y ago
>Edit2: we'll push through the bitcoin credit at today's price instead of the original buy price (which should be in your favor) since the mistake was on our part. Sorry again for the trouble! Is this an actual policy of Coinbase, or restricted to times when you get bad press? Because when I saw this post I could swear that it was about me. I gave you $467 about 24 hours after the OP for 0.5 BTC, with the promise that I would have the coins 5 days later (when they were still worth $450 or so). See this screenshot from earlier today http://imgur.com/4WrTDPy http://imgur.com/4WrTDPy Since I took that screenshot 8 hours ago, the coins have been credited to my account (finally) and are worth about half what I paid for them. Now my problem was a couple orders of magnitude smaller than that of the OP here, which is why it hasn't been worth my time to send a lot of emails about it or post on HN (and the market looked OK until 24 hours ago). I had chalked it up to the risk of performing financial transactions in an unregulated marketplace. But I feel compelled to provide another example given your assertion that this only occurred with a 'handful' of orders.
Derpbase 13y ago
> It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. You are JUST NOW figuring this out? We all assumed you were idiots before for using Mongo at all. Then to know you are using it for financial transactions made it worse. And NOW on top of all of that, turns out you don't even watch your transactions during server upgrades? You do realize Mongo isn't a very good database for anything you care about keeping right?
mgrunin 13y ago
Brian, thank you for fixing the issue and making things right. As they typically say, a great company isn't judged by how many problems they have, but by how well they handle their problems. You got a +1 here.
laironald 13y ago
brian -- i've been trying to contact coinbase as well. i sold a decent size of coins (5 figures in USD) and i waited, waited and never received the balance in my bank account although it seems to claim to have completed. i've been waiting for days and contacted your group using support same problem. waiting and waiting... what's going on? it's a large amount of money and i have no idea how to get in contact.
- laironald 13y ago
  some more details: coins initiated to be sold on Dec 6 -- never received in my bank account although it looks like it "completed" on Dec 12. putting me in a weird financial situation.
bonemachine 13y ago
Thanks for the clarification, Brian. That's very reassuring.

bonemachine 13y ago

If in fact there's been no fault on the customer side, then obviously he deserves not only a (profuse) apology -- but fair restitution for any losses suffered while your people were dithering on how to follow up to his perfectly reasonable request. BTW in equities trading I believe this kind of botched transaction would be treaated as a "Failed to Deliver" (FTD), and that's exactly how these things are handled.

CyrusL 13y ago
Coinbase is not an exchange like Bitstamp or Mt.Gox. This fact is not just something buried in their T&C. Their company communication has never described their product as a tool for day-trading. They made a promise to deliver bitcoins at a certain price and on a certain date. The original poster's issue is equivalent to Amazon promising 2 day shipping but the book came a few days late.
- gst 13y ago
  So with Amazon I'd just return the product if it arrives too late. Does this work with Coinbase too?
- gamblor956 13y ago
  No, it's nothing like shipping a book 2 days late. The OP has actual, recognizable economic losses as a result of Coinbase's delay. The transfer of money via ACH is a separate transaction from the Bitcoin acquisition. After the admitted delay following the Bitcoin acquisition transaction, Coinbase should have either reaffirmed that the OP wanted to purchase the coins at the original price, canceled the transaction, or acquired the coins at the then-market price. (Note, normally when the price increases, Coinbase cancels the transaction.) Consequently, the OP has a solid legal case against Coinbase. Unfortunately, for the amounts involved its borderline not worth pursuing. It's too large an amount for most small claims courts, and too small an amount to justify the time and cost of civil litigation (unless it settles at the very early stages). Indeed, based on Coinbase's record (refunding purchases if BC prices increase rather than executing the transaction), it's very likely that they are factoring this arbitrage into their business model.
  - hnha 13y ago
    It is pretty much like that if you buy a book to gamble with its resale value.
    - deleted 13y ago
      [deleted]
    - r00fus 13y ago
      That's not the primary intention of the book - the book has intrinsic value that BTC do not. The value of BTC lies predominantly in the market value. So the book analogy is ridiculous and patronizing.
  - jeremyrwelch 13y ago
    OP has no economic loss as a result of Coinbase's delay. OP has a loss as a result of Bitcoin price changes independent of this error.
    - FireBeyond 13y ago
      Which could have been mitigated -had Coinbase fulfilled their delivery, as negotiated-. Ergo, material losses.
- apalmer 13y ago
  The key here is the promise to deliver bitcoins at a certain price at a certain date. If they indeed promised to deliver on a certain date then clearly they are in violation... not sure if they really did make that promise though
- tedunangst 13y ago
  It's somewhere between Amazon delivering your book the day after Christmas and TicketMaster delivering your ticket the day after the concert.
- PeterisP 13y ago
  If I order a $30000 shipment of fish and you deliver them 2 days late, I have all legal rights to refuse the shipment and require the full amount back + my losses or lost profit (in the amount I can prove in court) for not having the fish back when you agreed to deliver them. You don't need to be called an exchange or sell currencies in order to be financially liable for delays; and the more perishable/volatile the product is, the larger the possible liabilities.

eof 13y ago

again, the best way to get support from coinbase is posting on public forums. i love coinbase, i think guys have done and will continue to do amazing things for bitcoin, and by proxy the world at large.. but your initial customer support is outrageously terrible and has been for way too long. you always seem to make it right in the end.. but you should hire about a dozen of the ten thousand kids that would love be on your support team

hack_edu 13y ago
After the 25mil from a16z, I doubt these problems will continue for much longer.
- bsiddiqui 13y ago
  you shouldn't have to raise money to provide solid service
  - lsc 13y ago
    >you shouldn't have to raise money to provide solid service I agree... but being a market maker is one of those things that requires some reserves, and especially the early exchanges? when bitcoin was under a buck, I can totally see getting together with a couple friends and putting $20-$30K in the reserve pot and giving it a go. But with bitcoin appreciating 1000x? yeah, uh, that got serious fast. Thirty grand is no longer anywhere near a reasonable amount of operational reserves
fragsworth 13y ago
If only Mt. Gox were as responsive. I haven't been able to pull my bitcoins out of there for a month now, because they still haven't verified me. Add to that the fact that their fucking site LIES TO YOU about how you can withdraw 100 bitcoins per day, and then surprises you with how you can't actually withdraw any until you get verified first.
kudu 13y ago
It's worrisome that you have to basically complain on a public forum in order to get a reaction from them.

onedev 13y ago

Make sure you give him the new price.

quannabe 13y ago
I don't think you quite understand how Coinbase works. Since most transactions are ACH (and reversible) they take ~5 days before the coins are available. This is disclosed up front, and again when you purchase bitcoins.
bct 13y ago
quannabe: You have been hellbanned since your second comment.

abijlani 13y ago

I've had a terrible customer service experience with Coinbase too: http://amit.roon.io/an-open-letter-to-coinbase http://amit.roon.io/an-open-letter-to-coinbase

anoncowherd 13y ago
Funny how whenever a company gets enough bad publicity to actually hurt their bottom line, suddenly their customer service runs a bit smoother.

laudenum 13y ago

Why did it take a public complaint to get you to do your job? Did you process the transaction using the current exchange rate or the December 8th rate? If its the latter why would anyone use your service?

sergiotapia 13y ago

Did you credit his account using the rate of the day he purchased his coins in? If not that's unnacceptable. Why would anyone use your sevice? Why does it take a public shaming for you to do your job?

deleted 13y ago
[deleted]
- FireBeyond 13y ago
  You seem quite the apologist: "To not expect some errors from a startup with an emerging technology is just silly. Users should expect some errors, and expect fixes to those errors by Coinbase as properly happened in this case." Huh? A startup dealing in financial instruments doesn't just get to say "Startup!" "1.0!" "Beta!" or "MVP!" and wash its hands of responsibility. If I do $10,000 worth of damage to your car due to my (in-)action, and throw $50 at you "by way of apologizing", your losses are somehow mitigated?
  - jeremyrwelch 13y ago
    I never advocated that they could wash their hands of responsibility. My statement was that any users of a startup should understand that there are risks that come with using any new service/technology/etc. That's not to absolve a new company of their responsibility, it's just prudent business sense from a user perspective. I just think that too much blame is being put on Coinbase. There is anger at the delay mixed with anger from the price swing, and too much is being directed at Coinbase.
    - jessaustin 13y ago
      You may not have intended this, but your posts on this thread have convinced me that Coinbase should not be held responsible for their own errors that hurt their customers. Now, care to take a guess at whether I'll ever be a customer?

ivanplenty 13y ago

The server upgrade bug: 1. How many other customers were affected by the server upgrade? 2. Why was this not caught at the time or after? The customer response bug 1. What steps are you taking to correct the issue it took a front-page HN story to get traction? 2. Will you commit to writing a post-mortem blog post? If you don't learn from your mistakes, then you are deeply doomed. I don't want you to be doomed :)

towski 13y ago
Welcome to the wild west
ziyan 13y ago
In my case, the buy was initiated on Dec 7, 2013, ACH cleared on Dec 11, 2013, bitcoin credited today Dec 18, 2013.

kenna 13y ago

because of your delay, he lost $13226.98 at current market rate: http://www.wickedfire.com/shooting-shit/177828-where-my-bitcoins-coinbase-shapow-3.html#post2144449 http://www.wickedfire.com/shooting-shit/177828-where-my-bitc... I hardly think $50 is going to make him feel happy.

ChrisClark 13y ago
And because of their delays, many others have made money on the transaction. They pay out at the market price of when the order was placed. The OP thought it was worth it then, and bought them then.
- gamblor956 13y ago
  What you seem to be missing is that the OP tried to buy them then, Coinbase did not process the transaction in a timely manner, and subsequently bought the coins for the OP today after the OP's post at the original price, having already breached the purchase agreement. This is a pretty close to being a classic contract law case, except with bitcoins rather than tangible goods. If this goes to trial, the outcome is not likely to be favorable to Coinbase.
- jules 13y ago
  He may not have held on to them, which he was forced to due to the delay.
- tedunangst 13y ago
  At any time between then and now, the OP could have realized his mistake and sold the bitcoins for a lesser loss had they been in possession of the bitcoins.
  - ChrisClark 13y ago
    Coinbase is not for trading though. He should have purchased on an exchange then.
    - 13y ago

iblaine 13y ago

As a data warehouse engineer, I feel the frustration here. d'oh.

kjackson2012 13y ago

Hopefully you are selling him the BTC at today's rate, and not at $868. This post is an admission of guilt on your part, so if you don't, he likely has a great case when he sues you (which I would, if I suffered a $12k loss like he just did).

asperous 13y ago
He only suffers a loss if he sells. I'm bearish, but it's too soon to say that it's never going back up to 800.
- FireBeyond 13y ago
  ... which he could have minimized if he had access to the coin when promised.
jeremyrwelch 13y ago
Don't be silly. He suffered a $12k loss because of price fluctuations most likely tied to People's Bank of China news, not because of Coinbase's error. There are no grounds for a lawsuit here.
- kudu 13y ago
  What are you talking about? He could have sold them on December 13 if he had gotten them at that time.
ameister14 13y ago
Yeah, only if he can make the case that he would have sold or used the bitcoins prior to the new valuation, and only if you don't treat it as a currency.
patmcc 13y ago
Was the delivery date of the BTC ever set? They guaranteed a price and delivered on it (yes, they took a while, yes the value went down in the meantime). If the price went up, everyone would certainly expect them to deliver at the guaranteed price and not the current one. What they probably should have done is just reversed the transaction entirely, but if I was deciding this, barring some agreement on delivery time, Coinbase would be mostly blameless.

bonemachine 13y ago

Lemme get this straight, Brian: Rather than refunding the dollar value ($35,104.11) of the original, clearly botched transaction, you ended up giving him the 40 BTC at their current trading value (about $560), that is, for net a loss of $35,104 - $22,400 = $12,704? And you think $50 plus a thank-you note(!) is enough to make him whole on this loss?

makomk 13y ago
Don't worry, based on their past behaviour I'm pretty sure they'd have managed to refund him the dollar value if the price of Bitcoin skyrocketed.
- EGreg 13y ago
  Funny dynamics for bitcoin to be used as a currency For now its swings are like the Zimbabwe dollar
  - deleted 13y ago
    [deleted]
  - AnneOminous 13y ago
    This isn't a failure of Bitcoin. It's a failure of the market. Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. Current market price has been very far from that. Bitcoin market right now is pretty much the definition of a bubble. Beware. In a "bubble" market, your money can disappear overnight. But again: that's not Bitcoin's fault. It's the fault of idiots vastly and irrationally driving up market prices. This is really a textbook lesson in why Wall Street does not represent the "real" exonomy.
    - dragonwriter 13y ago
      > Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. The current cost of mining is a rough replacement cost of bitcoin (and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying), but since mining isn't inherently reversible its not an intrinsic value.

prawn 13y ago

I laughed at $50!

deleted 13y ago

[deleted]

bdesimone 13y ago

Skettios. What is coinbase doing to prevent this from happening in the future? Both from a customer service perspective, and from a technical one. I want to assume good faith, but I'd also like to verify before doing business with you.

seldo 13y ago

Forget the difference in the exchange rates. Are you saying you have no system in place to monitor if transactions execute successfully? I'm not trying to be hyperbolic but that's really shocking for a company that is trying to play a role as a financial institution.

slg 13y ago
>that's really shocking for a company that is trying to play a role as a financial institution. That is probably the scariest part about the current Bitcoin community. Many of the big names are simply "playing a role". We have no idea of their technical expertise, the viability of their software, their USD/Bitcoin reserves, how they plan to address disputes like this, or even whether they are skimming of the top.
- revelation 13y ago
  And a majority of the (previous) big players have been compromised on more than one occasion. It's a big kindergarden.
  - deleted 13y ago
    [deleted]
- seldo 13y ago
  I mean, MtGox stands for "Magic The Gathering Online Exchange". They were literally set up to sell trading cards. The whole "being the biggest bank in a new $6bn+ economy" is a pivot. The whole system is crazy. But even by those standards, taking 35 grand and not noticing you didn't give them what they paid for stands out.
  - tedunangst 13y ago
    But even by those standards, taking 35 grand and not noticing you didn't give them what they paid for stands out. That's really the weird part. This is a business that does money in, money out. They should be balancing the books and checking inventory every day. It can take Amazon a while to realize a mistake because it takes time for somebody to go around the warehouse and count all the boxes to discover they're holding excess inventory. But how long does it take for Coinbase to compare the number in column A to the number in column B?

bushido 13y ago

Yikes! Please tell me you consulted with a lawyer before posting this publicly? Even if you gave the OP the BTC at current rates SEC/Courts can make a case against this sequence of events. It does not even have to be reported. I have nothing against you or Coinbase and I do sincerely hope I am wrong. This can have dire consequences on your current and future business(es). It would have been best to refund the withdrawal in its entirety or just credited it, to be used for a future transaction as that would have saved you guys from a world of pain. For any other service I would have given you Kudos for acting, albeit slowly, and applauded honesty(though not so much due to blaming it on the servers, which in a financial context is unacceptable). But for a business that a court can deem/classify as a financial institution (regardless if you consider yourself one), this could be considered as a admittance of wrong doing. edit: grammar

joonix 13y ago
Coinbase is not a bank. Or a financial institution. If it were, it'd have a charter and licenses. It's a merchant just like any other. You give them money in exchange for goods. No different than iTunes.
- bushido 13y ago
  It does not need to be licensed as a financial institution to be deemed as one. The courts can and will deem them that the company is subject to some of the rules and regulations governing the financial industry and up the charges against them when this enforced. I am purposely not saying 'if'. Because there is no possibility of this not being brought to a judge on the behest of SEC themselves or a consumer complaint. In layman terms: (1)they buy and sell BTC on behalf of clients and charge the client for the transaction including their fees. (2)they are an online payment processor of sorts. They will need to follow more regulations than Paypal, as paypal is also a digital wallet of sorts, but while it provides a conversion, they technically do not trade(buy/sell currencies) on behalf of clients.
  - blantonl 13y ago
    Bitcoin is not an official currency in the eyes of the law. Therefore, there are almost zero regulations that would apply to Bitcoin transactions, other than contract law.

1945 13y ago

In other words, Coinbase is going to supplement ~$13,950 loss with $50.

jlas 13y ago
In other words, Coinbase just pocketed his loss. (Assuming the transaction was made today.)
- LandoCalrissian 13y ago
  That would be my impression, and that's really shady.
  - alttab 13y ago
    This, including the XSS comment elsewhere in this thread has prompted me to move my coins ASAP. Coinbase US understaffed, running fast and loose, and can't handle the spike in attention. This proves bitcoin isn't ready. Coinbase has a long road ahead of it.

dkersten 13y ago

If this is the case, why didn't you respond to the emails?

downandout 13y ago

I do hope that, at the very least, you will not make him pay the "locked in" price for a delay that is your fault. There are many threads on bitcointalk.org suggesting that these delays only happen when the BTC price is very volatile, and that once they are resolved, the actions taken by Coinbase (either cancellation of the order or delivery at a locked in price) always inure to the financial benefit of Coinbase. I am certain that the Coinbase TOS allow significant discretion as to the timing and cancellation of orders. However, systematically delaying orders and then cancelling or forcing people to buy based upon which will be most profitable for Coinbase, which seems to be occurring, could certainly be construed as fraud.

bdesimone 13y ago

Edit2 = Damage control.

deleted 13y ago

[deleted]

Udo 13y ago

Offering restitution after a customer went to the media is not enough. If this is a systemic problem (and indications are: it is), you have to take steps to avoid these scenarios in the future. Having a customer service that actually responds to issues meaningfully would be a first step, but that's only the beginning. There's a technological solution to this. If you know that for whatever reason some transactions might never complete on your end, one of several obvious solutions would be to introduce a timeout after which the transaction is rolled back automatically. That means introducing a batch process to at least trigger a manual review of these cases, and possibly even an automated cancellation with repayment. Doing that within a business day of receiving the money wouldn't be out of order, maybe even make it an hour or so (this is supposed to be a fast medium, right?)

anoncowherd 13y ago

>> It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal Oh? Did that also cause some kind of downtime in your customer service operations, considering you sure took your sweet time in getting back to him? Funny how the front page of Hacker News makes things run a bit smoother, huh?

philfreo 13y ago

Off-topic, but since you guys have ignored: 3 emails from me, and a tweet... I sent you an XSS vulnerability to whitehat@coinbase.com according to https://coinbase.com/whitehat https://coinbase.com/whitehat almost 3 weeks ago and haven't received so much as a confirmation "thanks we are looking into it" email from you guys.

tnorthcutt 13y ago
To anyone considering or currently using coinbase: this comment (if verifiably true) should be a GIANT red flashing light warning you to tread carefully.
alttab 13y ago
This scares me.
- nanidin 13y ago
  Enable 2 factor authentication. IIRC Coinbase doesn't use it per user action, but at least having it has the potential to save you some headaches.
borski 13y ago
Coinbase guys: if you'd like, we're happy to offer you a free 3 months of website vulnerability scanning to hopefully help you find and squash any vulnerabilities like this. Just email me at borski@tinfoilsecurity.com.
philfreo 13y ago
It was frustrating that I didn't receive any contact from Coinbase until after posting on here HN, however I'd like to point out a couple things: - This was a relatively minor XSS vulnerability which required a bit of social engineering to pull off, rather than being a traditional XSS that most HN readers would need to worry about. - Their delayed response was likely due to the relative minor nature of this vulnerability. - I still feel safe using Coinbase - They're taking care of it and treating me well :)
barmstrong 13y ago

ErikRogneby 13y ago

+1 for owning up that this was a bad customer experience. -1 for the cavalier, "looks like were were performing server upgrades last week..." That is a startup excuse. I'd love to hear Chase Bank use this excuse and see how that flies with banking regulators.

ziyan 13y ago

One of my buy order also experienced the exact same issue. It was placed on Dec 7, 2013, and it was supposed to credit last week as well. The ACH (A1TBCFQ3) was cleared on Dec 11, 2013, and the bitcoin (11UARZ7A) was just released today. Apparently, My transaction was lucky enough to be in one of your "handful" lost jobs. The worst thing is, during this whole time, my support ticket was never answered and is still unanswered. There is no indication that it has ever been read by a human. Since you admitted to guilt, I shall be entitled to the bitcoin credit at today's price as well.

zallarak 13y ago

I understand that you guys have a ton of work going on, but if you are charging for a service you need to deliver and respond to your customers on time before they feel the need to go public. I started my career as a "customer service superhero" at ZeroCater and was the only employee for a while. There was a staggering amount of work to be done at times, most of it non-customer service related. I'd never leave without making sure every customer email was addressed - and this was a much more trivial issue (lunches). This is not just human decency, but its good business practice. I wanted to speculate (yeah it's speculation :P) on bitcoin using your service, but no longer will, and will no longer refer your service to others (unless something changes, of course). It is not a question of ethics, but a question of me making a good decision - why would I trust my money with a business that doesn't feel the need to address customers on time (especially those who trust them with significant sums of money) This issue would have cost you a maximum of 2 hours of free time/sleep to fix - now its costing you a customer (I'm sure the cost is actually far greater, judging by the exposure of this thread). Was it worth it?

sjp 13y ago

Bravo Brian re edit#2 - there may be hope for some customer service after all! Is it too much to assume that you will be pushing through the bitcoin credit at today's price instead of the original buy price for all those affected by your "mistake" (your words). I too have had the same problem - albeit on a smaller scale.

kordless 13y ago

Hey Brian. Appreciate your response and explanation. When you come up for air, would love to see a blog post about the issue and some thoughts on monitoring for such failures. I've run into this type of problem before in architecture.

simonebrunozzi 13y ago

Quick comment on Edit2: very nice of Coinbase to do this; and I can be almost certain that it would NEVER happen with a normal bank. Brian, well played. Keep up the good work.

functional_test 13y ago

You can't possibly be serious. You pocketed his ~$12K loss and you're giving him a $50 credit? Are you high? Sloppiness like this wouldn't fly in actual finance. It would get you fined and possibly more. Lacking any sort of internal controls, even something as simple as balancing your books and verifying all transactions... It's shocking and negligent. Even more so for a YC company. Shame on you.

dangero 13y ago

Wow now I'm pissed. I had the same issue but didn't make a public stink about it. Just got my coins today with no credit for the mistake and the same issue of my coins being frozen at a higher price. Looks like I should have been more rude about it. Not only that, but I was told that my coins could not be released earlier because "they needed to be removed from cold storage". So now we have 2 different excuses for failures in the same time period. The cold storage excuse seemed completely bogus to me too because we're talking about crediting a number to my account, not getting actual Bitcoins. They don't become Bitcoins till I send them out of Coinbase.

saraid216 13y ago
I support filling the HN front page with stories like this. Especially if it means that you get your money back.
mgrunin 13y ago
Make a public stint about it if the issue isn't resolved accordingly. There is no reason to pay the price for a mistake by their company.

Zarathust 13y ago

So you've screwed him out of 13 000$, but gave him back 50$? That is ADORABLE.

barrkel 13y ago

You need to have at least one person in charge of reconciliation. If you're not running recs with data feeds from the various parts of your system doing transactions, you're just a lawsuit waiting to happen. If you were an actual regulated financial entity, not running recs would be illegal under risk management requirements.

cmsmith 13y ago

>Edit2: we'll push through the bitcoin credit at today's price instead of the original buy price (which should be in your favor) since the mistake was on our part. Sorry again for the trouble! Is this an actual policy of Coinbase, or restricted to times when you get bad press? Because when I saw this post I could swear that it was about me. I gave you $467 about 24 hours after the OP for 0.5 BTC, with the promise that I would have the coins 5 days later (when they were still worth $450 or so). See this screenshot from earlier today http://imgur.com/4WrTDPy http://imgur.com/4WrTDPy Since I took that screenshot 8 hours ago, the coins have been credited to my account (finally) and are worth about half what I paid for them. Now my problem was a couple orders of magnitude smaller than that of the OP here, which is why it hasn't been worth my time to send a lot of emails about it or post on HN (and the market looked OK until 24 hours ago). I had chalked it up to the risk of performing financial transactions in an unregulated marketplace. But I feel compelled to provide another example given your assertion that this only occurred with a 'handful' of orders.

Derpbase 13y ago

> It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. You are JUST NOW figuring this out? We all assumed you were idiots before for using Mongo at all. Then to know you are using it for financial transactions made it worse. And NOW on top of all of that, turns out you don't even watch your transactions during server upgrades? You do realize Mongo isn't a very good database for anything you care about keeping right?

mgrunin 13y ago

Brian, thank you for fixing the issue and making things right. As they typically say, a great company isn't judged by how many problems they have, but by how well they handle their problems. You got a +1 here.

laironald 13y ago

brian -- i've been trying to contact coinbase as well. i sold a decent size of coins (5 figures in USD) and i waited, waited and never received the balance in my bank account although it seems to claim to have completed. i've been waiting for days and contacted your group using support same problem. waiting and waiting... what's going on? it's a large amount of money and i have no idea how to get in contact.

laironald 13y ago
some more details: coins initiated to be sold on Dec 6 -- never received in my bank account although it looks like it "completed" on Dec 12. putting me in a weird financial situation.

bonemachine 13y ago

Thanks for the clarification, Brian. That's very reassuring.