Let me rant a little: Coinbase fraudulently enriches itself

[EarnOnVictor]

Guys, this might look funny to you, but it's not funny. Actually, as I'm writing now, it's a mix of feelings of laughing and anger within me. Of course, you could have known the reason for the laugh, the money is so little, why the rant? But the second part which is anger is worth it as well, because no matter how little the money is, Coinbase doesn't have the right to confiscate it, it's my money, not theirs.

Frankly, I'd forgotten the money there since last year until recently when I persistently received messages that I needed to move all my money. I last saw such a message last year if I'm correct, and I remember I couldn't move the money which was why I left it then.



I tried again a few days ago, but I can't withdraw my little money of $0.89 due to the restriction of 0.0001 BTC withdrawal. Come to think of it, they want to go, should they go with people's money as well? I know that they have their withdrawal policy of 0.0001BTC as a minimum, but should that apply also when they are leaving? This happens so much in fiat, but shouldn't be in crypto, this is why it gets me annoyed.



My quick surf shows that Coinbase had 108 million users as of 2022, but let's assume that just 20 million of their customers have a low amount in their accounts they can't withdraw like myself. They can't make less than $15,000,000 from this singular act. Because by the calculation through the current bitcoin rate and their minimum withdrawal of 0.0001BTC, they will seize from $2.71 lower, which is a huge amount in millions.

I must tell you my mind, this pains me despite being a small amount. I prefer to give miners the money than exchange. They've been mailing me three times a week now to withdraw the money that I couldn't withdraw due to their imposed restriction. They are trying to show that they did their part before locking the account forever. I'm still pondering if I should send an official email to relevant institutions to look into this potential scam. I'm particular about about their cunningness.

It's not about the size of the money but the manner in which one's hands are tied as Coinbase preaches hypocrisy.

[Zaguru12]

Yeah we all agree that exchanges mostly the centralized ones are just there to enrich themselves and that is part of the reason why it is Crystal clear not to save fund on them

But mate I don’t think they did anything related to hypocrisy here because the rule to have a minimum withdrawal of 0.0001 btc was pointed even before the current saga, so before you even deposited there and left that amount you know you ain’t getting it back and the only way is to top it up to reach the minimum. So i don’t see the reason for the fuss here, it would have actually been annoying if only they brought up the rule at this time.

Also if they should allow the number of such withdrawals, how much will be left if the charges applied are deducted? Personally I don’t see this as an issue to write to them.

[Oshosondy]

At least they are giving people a notice to withdraw. That is good.

but should that apply also when they are leaving? This happens so much in fiat, that's why it gets me annoyed right now.

Yes, withdrawal fee would be deducted. If we should leave the withdrawal fee aside, even bitcoin network transaction fee for bitcoin is not far lower than $0.89. Right now with 27 sat/vbyte, transaction fee that will get 1 input and 2 output transaction confirm is $1.03. That would be a loss for them as they will want to use a fee that will process your transaction fast.

Coinbase is a business organization, not your noncustodial wallet.

[Alphakilo]

But the second part which is anger is worth it as well, because no matter how little the money is, Coinbase doesn't have the right to confiscate it, it's my money, not theirs.

Errm yes. They have the right to confiscate your money because you are keeping in their custody. They are offering a service and as such you have to abide by their rules. You should have red their T&C when you signed up. It is not a charity organization it is a business entity.

I also received the same email and I would like to point out that it was stated specifically that there is going to be a fee charged for withdrawal. See it
"This is a friendly reminder that we will be discontinuing services to your above-mentioned account.
Please note that you will be able to access Coinbase.com or the Coinbase app until 25th September 2023 and should withdraw any funds held in your account by such date.
Your funds remain secure with us, and you are able to send funds to other crypto wallets or services (subject to standard network and transaction fees), including Coinbase Wallet."

[Marvelman]

I'm not familiar with how Coinbase works, so I'm just throwing ideas out there. Maybe you could consider exchanging your Bitcoin for a cryptocurrency with a lower minimum withdrawal limit and lower fees, if that's an option.

[Yamane_Keto]

Sometimes some CEXs increase Bitcoin withdrawal fees to persuade users to trade, buy cheaper altcoins and leave Bitcoin to them we see this policy clear in Binance, as the fees for withdrawing Bitcoin on another blockchain or altcoins are cheaper than the fees for withdrawing Bitcoin.
Sometimes they set limits because of transaction fees, and sometimes they are exaggerated fees that they earn from.

If you can trade, convert it to XRP, withdrawal fees are cheaper.

[rat03gopoh]

but let's assume that just 20 million of their customers have a low amount in their accounts they can't withdraw like myself. They can't make less than $15,000,000 from this singular act.

Yeah, and it applies once to 1 user, guess if you have the desire to come to that platform again? No?
Don't think it's their chance, because every time this warning is given it means they lose their sustainable income. And they sure hurt when they drop it on users with balances worth hundreds of thousands of dollars. Just take the positive message, for example this can happen on other exchanges.

[Rikafip]

I must tell you my mind, this pains me despite being a small amount. I prefer to give miners the money than exchange.

If you really really don't want to give that $0.89 to Coinbase, why don't you send some BTC (just enough to meet that minimum withdrawal amount of 0.0001 BTC) so you can withdraw everything, without leaving a single cent. At least that's what I would do if I was annoyed as you at this situation.  

[EarnOnVictor]

At least they are giving people a notice to withdraw. That is good.

Hypocrisy! Why telling me to withdraw what I can't actually withdraw? I'm sure their system would have informed them of those with lower minimum balances.

Yes, withdrawal fee would be deducted. If we should leave the withdrawal fee aside, even bitcoin network transaction fee for bitcoin is not far lower than $0.89. Right now with 27 sat/vbyte, transaction fee that will get 1 input and 2 output transaction confirm is $1.03. That would be a loss for them as they will want to use a fee that will process your transaction fast.

Coinbase is a business organization, not your noncustodial wallet.

I thought of this as well, and a very good reason why people should stick to a reasonable custodial wallet with better service that enables you to manoeuvre your way into withdrawing all your money. It's mine, not theirs.

In addition, being a custodial wallet is not a justification for not letting me withdraw the money, it's just their own company's rules. Companies do such for a reason like this, just to swindle people of their money in a situation like this.

But the second part which is anger is worth it as well, because no matter how little the money is, Coinbase doesn't have the right to confiscate it, it's my money, not theirs.

Errm yes. They have the right to confiscate your money because you are keeping in their custody. They are offering a service and as such you have to abide by their rules. You should have red their T&C when you signed up. It is not a charity organization it is a business entity.

What now happens to my money after the 25th of September as you claim it's their right? Also, I will be glad if you can point to the clause in their T&C where they are entitled to confiscate my money simply because they are a custodial arrangement.

If you really really don't want to give that $0.89 to Coinbase, why don't you send some BTC (just enough to meet that minimum withdrawal amount of 0.0001 BTC) so you can withdraw everything, without leaving a single cent. At least that's what I would do if I was annoyed as you at this situation.  

I've thought of this but it will be an unwise decision because I will pay miners' fees to and fro and Coinbase might want to add their own fees as well. It's another ill arrangement of centralized structure designed to tie one's hands.

[Oshosondy]

Hypocrisy! Why telling me to withdraw what I can't actually withdraw? I'm sure their system would have informed them of those with lower minimum balances.

It is possible that not only people that still have money left on the custodial wallet are sent the message, all the affected people that do not also have anything left on their Coinbase.com account also can be sent the message.

What now happens to my money after the 25th of September as you claim it's their right? Also, I will be glad if you can point to the clause in their T&C where they are entitled to confiscate my money simply because they are a custodial arrangement.

The money will belong to them. But what about the exchanges that their customers will make a slight mistake that will lead to loss of the customers coin and nothing would be done after the exchange has the coin becusse they have the private key? This one you are talking about is still better and I think it is something that the affected people should just overlook

[bakasabo]

That is not the only way they enriches themselves.

In the beginning of 2023 I've made a deposit (just some CRO from crypto.com account), but fund never came to my account. The deposit address was correct, transaction was confirmed. Their support is a bot that answers mostly yes/no and gives answers from FAQ only, or redirects to FAQ each time I've selected "no". Long story short, I've sent them email with all information about my issues and got an automatic reply that they gonna sort things out (they did not). And in one month I've got a second email with text like "a lot of time has passed since I've created my ticket with issue, so they consider that problem is already solved. so we decided to close that ticket". One of worst support experience ever. Never again I'm gonna make a deposit there.

[LoyceMobile]

Hypocrisy! Why telling me to withdraw what I can't actually withdraw? I'm sure their system would have informed them of those with lower minimum balances.

Isn't this the same with every exchange? I've lost "dust" a few times this way, and I've never used Coinbase.

Banks can't get away with this, I guess that's because of regulation. A proper solution would have been too offer LN or a low fee altcoin.

[Rikafip]

Hypocrisy! Why telling me to withdraw what I can't actually withdraw? I'm sure their system would have informed them of those with lower minimum balances.

They probably automatically sent an email to everyone that has any money left there and that is in your situation, even if it was $0.01 worth of crypto.

What now happens to my money after the 25th of September as you claim it's their right? Also, I will be glad if you can point to the clause in their T&C where they are entitled to confiscate my money simply because they are a custodial arrangement.

I won't bother going through their Terms & Conditions, but you can bet that their covered these type of scebarios. If these type of companies do something right, its covering their asses so they don't get sued over stuff like this.  

I've thought of this but it will be an unwise decision because I will pay miners' fees to and fro and Coinbase might want to add their own fees as well. It's another ill arrangement of centralized structure designed to tie one's hands.

Then there's nothing else to than just suck it up and accept the current situation, or not use centralized exchanges ever again.

[FinneysTrueVision]

It is not fraudulent to have a reasonable withdrawal minimum. Once they deduct the fee you will be left with an amount that is too small to spend if you’re even left with anything at all since the current high priority fee would be close to $1. Coinbase has done plenty of unethical things such as listing tokens which Coinbase Ventures was heavily invested in and it’s employees trading on insider information. Refusing a withdrawal which would only spam the Bitcoin network doesn’t meet the criteria of being considered one of their fraudulent self-dealing schemes.

[EarnOnVictor]

It is not fraudulent to have a reasonable withdrawal minimum. Once they deduct the fee you will be left with an amount that is too small to spend if you’re even left with anything at all since the current high priority fee would be close to $1.

I understand what you are trying to convey, when it's in the normal operation, it's never fraudulent for any company to have their minimum withdrawal. But in this situation of Coinbase, the condition is no more normal, they are forcing everyone to withdraw their funds, so they should have a special condition for this. The amount is little but there is no fairness and justice in tying our hands to enrich themselves due to their restriction. If truly they want the low-balance user to withdraw their money normally and not just preaching hypocrisy, they should have lowered the minimum in this condition and let us decide the fate of our money whether we want to leave it with Coinbase or waste it on the miners.

The value of my money should be around $1 now since the Bitcoin price was about $26,000 when I made that post last month, the coin is way more the value now.

[Woodie]

EarnOnVictor you are right on this fraudulent behavior, it might look like a small amount when looking at it from an individual point of view, but when we take into account the number of users that it servers(was serving) it's not less than 20 million dollars begging to be swept off these accounts after they close shop.
Tbh if they wanted to leave with a clean sleeve to their name they would have deliberately asked every one with small amounts to provide addys to receive the satoshis so that they cover fees on the house  

[The Hidebehinder]

I understand what you are trying to convey, when it's in the normal operation, it's never fraudulent for any company to have their minimum withdrawal. But in this situation of Coinbase, the condition is no more normal, they are forcing everyone to withdraw their funds, so they should have a special condition for this. The amount is little but there is no fairness and justice in tying our hands to enrich themselves due to their restriction.

Then why not deposit $8.29 on it and get your $1.71 back?

Unfortunately unless there is a legal procedure that is triggering the termination of your account normal conditions apply to this, so it's their side terminating your access and on your side you can do whatever you want till the mentioned date but still constrained by the ToS you signed, if Binance would have done this while they were screwing with us with their $40 charge for a withdrawal they would have also acted lawfully, no matter how unjust it seems for us.
If you think Coinbase is bad, you might take a look at Starbucks.