Coinbase digs into $100 million funding round to add customer support phone line for angry cryptocurrency traders

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Coinbase CEO Brian Armstrong

- The company promised to expand customer service operations as early as June, but has faced an onslaught of unhappy customers in recent months as the userbase overpowered the support staff.

-However, a call we placed to the support line never made it through to a human customer support agent. The call ended after 15 minutes and 30 seconds, most of which was spent on hold. 

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If you need me, call me.

That's the latest message coming out of Coinbase, the $1.6 billion cryptocurrency trading platform, which addressed months of customer complaints on Wednesday with the opening of a customer support phone line.

The San Francisco-based company will now offer phone support during business hours, though the support agents can only handle issues related to verification and locked accounts. Customers that need specific account help will still have to reach out by email, or consult Ada, the Coinbase support bot. 

While Coinbase said the phone lines were live on Wednesday, a call placed by this reporter at 12:40 pm PST went directly to hold. After being on the line for 15 minutes and 30 seconds, the automated voice said that the lines were backed up, and that the caller should hang up and try again, or submit a complaint online. 

As the price of bitcoin hovers just below $4,000, more and more people are realizing the potential to make considerable sums of money by trading cryptocurrencies. 

It's been a mixed blessing for Coinbase, the leading cryptocurrency trading platform, which confirmed its unicorn status in August with the announcement of a $1.6 billion valuation. As its userbase grew - double what it was in September 2016, by the company's account - so did the number of complaints, ranging from locked accounts to thousands of dollars in unaccounted for funds.

One Coinbase user, Michael Sion, said he saw $16,300 disappear from his bank account without any explanation. He said that Coinbase immediately froze his account when he contacted the company. Despite contacting the company every day, it took over a week to hear back about what went wrong, Sion said. After Sion reached out to the U.S. Consumer Financial Protection Bureau and the California Attorney General's office to complain, he finally got his account unfrozen by Coinbase.

In the end, it turned out that Sion had made a mistake when indicating where the money was to be pulled from. But he contends that the issue - and his escalating concerns that Coinbase had committed fraud - could have been mitigated if the company had responded to his complaints sooner.

"I hope as a consumer they do a better job and meet the standards of the rest of the financial community," Sion said. 

Among the 89 negative reviews on the Better Business Bureau website, many of them focused on that same point of contention: the user complained via email, but didn't hear back from Coinbase for days or weeks, if at all. In multiple cases, thousands of dollars were on the line, and the users feared that money would be gone forever. 

"Despite multiple attempts to contact their customer support, I have received no response from them beyond an automated email response to my inquiry. I have over $8k that I deposited into the account that I cannot withdraw from my account," Josh D. wrote on August 24.

Coinbase has long been aware that its customer support is an issue. In June, CEO Brian Armstrong wrote that the company had re-evaluated its growth plan in order to improve customer service.

But the issue was again thrust into the national spotlight in August, when the platform faced a mass exodus over its initial decision not to support a new currency called bitcoin cash. Many users faced a 12-hour wait time to withdrawal their investments, as some scrambled to transfer their bitcoins to competitors that would support bitcoin cash.

When the company announced a $100 million in Series D funding in August, the company said once again that expanding its staff was a top priority.

On Twitter, Armstrong posted a chart which indicated that Coinbase would have over 200 customer support staffers by October - up from around 25 in June. Coinbase wouldn't share specific numbers, but confirmed that the chart is an accurate representation of the company's growth, with most of the support staff coming from external agencies in the US and abroad.

In an email to Business Insider, a representative for Coinbase said that at the end of the day, the company just wasn't prepared for the growth it saw over the last six months.

"As a result, our systems have been pushed to the limit and has created a negative experience for some customers," the Coinbase representative said. "We understand how frustrating this can be and we are committed to improving the experience for our customers."

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