Los Angeles – After thousands of customer service complaints, Coinbase has launched a new live phone support line. However, many customers are dissatisfied with the company after the latest efforts to address their concerns.
Take Eric and Molly Richardson as an example.
Eric’s phone text message surprised him so much that he pulled him to the side of the road. July was a sunny afternoon.
The retired lawyer clicked on the message that someone logged in to his account. He logged on and immediately received an email stating that the two-factor authentication had changed. This means that your security settings may be at risk.
After that, the nightmare got worse.
He and his wife Molly have saved nearly $ 1.2 million in cryptocurrencies. Suddenly, as Eric saw, the scammers began to withdraw all their Bitcoin investments. It’s about $ 700,000. And there was nothing he could do.
“I panicked. I didn’t feel it for a long time,” Eric said, admitting that the text message was likely a phishing attack to get his account information.
Coinbase customers Erick and Molly Richardson lost about $ 700,000 in cryptocurrency when their accounts were hijacked by fraudsters.
Richardsons couldn’t ask Coinbase for help because the company only provided email support when the account was hijacked in July. According to government records and interviews, a CNBC survey in August found that accounts of thousands of customers had been hacked and hung from the company. Launched in April, Coinbase has a market capitalization of over $ 50 billion.
According to official records, since 2016, users have filed more than 12,000 complaints against Coinbase with the Federal Trade Commission, the Consumer Financial Protection Bureau, and Better Business Bureau. Since August, an additional 1,500 complaints have been filed.
Other crypto exchanges face similar complaints, but not as many as Coinbase, the largest exchange in the United States.
Coinbase opened a live support line in August in response to criticism that customers can’t talk to anyone in the company. However, dozens of customers whose accounts were hacked and leaked told CNBC that so-called help did not solve the problem.
In the case of Richardsons, Eric said it took only about 20 minutes for a scammer to withdraw 21 Bitcoins in 110 different transactions.
Eric reported the theft to Coinbase, which locked his account. But he said no one helped the couple get their money back or unlock their accounts for more than two months.
“I still don’t know how that happened,” he said.
In September, Richardsons called the new Coinbase phone support line. The agent told Eric that he couldn’t access the case file and suggested replying to the last email from Coinbase that he had already replied to. The 10-minute call ended with more dissatisfaction than a solution.
“It was a joke, it only made me a little more angry, and no one has the decision-making power in customer service,” Eric said. “They don’t help much. Do you know what Coinbase did two days after I was hacked? They sent me a customer survey and they gave me their service. I asked you to evaluate it. “
Coinbase customers across the country have talked similar to CNBC since live phone support began.
For example, customer Marc Boulos said in an email, “Live support is only for actively locked accounts. The account is no longer locked and you cannot access live support when you try to lock it.”
“The system is aware that the account associated with my phone number is unlocked and I can’t access live support,” Boulos wrote.
Another customer, Don Piltor, called the telephone line a “joke.”
And after trying to restore access to his account and failing, customer Conrad Yiu said, “It looks like it failed in all parts.”
A Coinbase spokeswoman said in a statement, “We plan to provide global phone support to all our customers and live messaging by the end of the year. Our goal is to be the most trusted and easy-to-use in the crypto economy. Becoming a platform is a challenge that some customers have experienced with their Coinbase account. Improving their experience remains a top priority. “
“In most cases, Coinbase does not cover the loss resulting from unauthorized access to your Coinbase account due to breaches,” the statement said.
Earlier this month, in a memo to Coinbase’s customers, the company revealed that a phishing attack from March to May 20 had stolen funds from about 6,000 customers. The hacker “taken advantage of a flaw in Coinbase’s SMS account recovery process to receive an SMS two-factor authentication token and access the account.”
A spokesperson for one company said, “We quickly fixed the flaws, worked with these customers to regain control of their accounts and reimburse their lost funds. These massive and sophisticated phishing attacks We highly recommend it to anyone as it grows. We use online financial services to stay vigilant and take the necessary steps to protect our online identities. “
When asked about Coinbase account security, a spokesman said, “Unfortunately, some Coinbase customers have been victims of phishing attacks and account hijacking, but an attacker has compromised Coinbase’s security infrastructure. No, “he said.
Experts say there is another way to store cryptocurrencies, which are essentially hack-proof.
A move that will help protect Richardsons and others is to move cryptocurrencies from exchanges like Coinbase to what is known as cold storage, or to move cryptos offline. ..
“I’m beaten every day because my friend’s voice is in my head.” Eric, keep it refrigerated. And I didn’t. “
Nicole DeCicco, who helps clients protect cryptocurrencies through her company CryptoConsultz, says cold storage is virtually hack-proof. The cryptographic owner obtains a private key, such as a password, and stores the key offline.
“Cold storage or cold wallets are completely disconnected from the Internet. They can be devices that connect to your computer,” she said. “When you refrigerate your funds, you own them … they are offline and away from hackers.”
Nicole DeCicco helps clients protect cryptocurrencies through her company CryptoConsultz.
“I want to tell my clients that I can load from a cold storage wallet to a hot wallet at any time, just like withdrawing money with an ATM card, but if you’re talking about a fair amount of money, it’s really a best practice. Refrigerating. It’s about keeping it. “
According to DeCicco, setting up an exchange account is easy, but setting up refrigerated storage is even more complicated. To set up refrigeration, many investors buy devices for this purpose. Next, you need to load the private key and store it securely, such as in a vault.
Refrigeration is safer, but it has its own problems. The owner may lose the password or the device may be damaged.
Richardsons said access to his account was eventually restored after more email exchanges with Coinbase. And the company sent them back some money.
But that wasn’t what they expected. The company has put $ 500 worth of Bitcoin into its account.
“It felt like they kicked the sand on my face,” said Eric Richardson. “Are there any Coinbase seniors watching this? Someone calculated and said,” OK, this is what happened to this guy. He lost 21 bitcoins. Give him $ 500. . “
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–CNBC Angelica Serrano-Rome When Nadine El Bawab Contributed to this report.