Mysterious Coinbase Outage Shuts Investors Down a Day After Robinhood Meltdown, Sparking User Fury: ‘They Just Froze All of Our Funds’
Coinbase users suffered from a massive outage on Friday that resulted in funds being widely locked down — even as the company insisted it had resolved the problem.
The issue comes a day after widespread anger over certain stock-trading platforms preventing users from buying shares in companies that experienced wild price surges this week. The fiasco caused one of those trading platforms, Robinhood, to trend on Twitter in conjunction with Coinbase on Thursday evening as users encouraged others to jettison Robinhood —and the stock market — in favor of Coinbase, a platform for investing in cryptocurrencies such as bitcoin.
However, Coinbase users on Friday morning began to report that any attempt to engage in certain transactions, including withdrawals, resulted in the platform quickly locking it down, even as fresh deposits were processed without issue. The development provoked users to express their outrage online.
“Who is willing to file a class action lawsuit against Coinbase?” one person asked on Reddit. “They have been doing this for years it’s not a technical glitch.”
“We’re getting completely fu*ked over by these corporations this week,” wrote another.
“COINBASE IS LITTERALLY (sic) SCAMMING PEOPLE RIGHT NOW LOCKING EVERYONES FUNDS PREVENTING TRANSFERS AND SENDS THEYLL ALLOW YOU TO DEPOSITE THO!!!???” another user wrote, prompting a Coinbase representative to say their team was “looking into” the issue and would return with an update within an hour.
Two hours later, the company returned to inform users service had been “fully restored.” The post infuriated users, who said they were still unable to access their money.
Coinbase, a San Francisco company founded in 2012, does not offer stock-trading options. However, the company did announce a desire last year to become listed as a publicly traded stock itself, a move requiring approval from the Securities and Exchange Commission. As a result, the company has sought to become more compliant in recent months with rules applied by the agency to the traditional stock market.
At least one user scathingly suggested the shutdown was related to a surge in the price of bitcoin. The currency rose from about $31,000 on Thursday to more than $37,000 on Friday after Elon Musk, the iconic founder of Tesla and SpaceX, added a reference to it to his biography on Twitter.
“Bitcoin sales disabled,” the user wrote in a message directed at Coinbase. “What an utter piece of sh*t. You [had] ONE JOB.”
“[Coinbase] cost me thousands today already in lost profit,” another user replied. “I’m so pissed I’m nauseous.”
Coinbase did not reply to multiple requests for comment from Mediaite.
UPDATE 4:33 p.m.: After publication, Coinbase provided a statement attributing the problem to “technical issues” claiming the issue had been resolved:
Due to a sharp uptick in trading volumes, this morning Coinbase suffered a series of technical issues that caused our customers to encounter a degraded trading experience over the course of ~5 hours. These issues impacted trading, sending, and receiving along with API connectivity. We have since resolved the issues and service has been fully restored. We apologize if the in-app notification was unclear and confusing to some customers. At no time was trading deliberately disabled or halted.
Our engineering teams are closely monitoring the situation and all available resources have been reallocated to ensure our platform’s reliability as we face prolonged high trading volumes. We sincerely apologize for the disruption that this has caused our customers and we are committed to delivering the highest quality trading experience moving forward.
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