Coinbase receives plenty of complaints

LendEDU reports that Coinbase draws the most criticism this year
30 August 2017   614

Coinbase, a digital asset exchange company headquartered in San Francisco, CA, is believed to draw plenty of criticism this year. 

Thus, an online student loan market LendEDU reports that Coinbase has received 288 complaints in 2017, a figure that represents a dramatic increase from the six complaints the startup received in 2016.

Coinbase complaints chart according to lendedu.comCoinbase complaints chart according to lendedu.com

LendEDU specialists asked Tyson Cross, an attorney with Cross Law and a specialist in Bitcoin tax law and anti-money laundering compliance, about the rise in complaints:

As a whole, the industry is growing and more consumers are creating accounts. At Coinbase, the userbase is growing very rapidly. However, as the industry has grown so to have the restrictions placed on companies like Coinbase by regulators. Regulators have forced exchanges, like Coinbase, to place tight restrictions and limits on users due to anti-money laundering concerns. Coinbase, and other exchanges, now require an in-depth verification process to withdrawal money.
 

Tyson Cross
An attorney with Cross Law and a specialist in Bitcoin tax law and anti-money laundering compliance

As reported, Cross went on to say that he believes the increase in complaints against exchanges is caused by the increasingly strict verification processes.

Concerning the complaints, Coinbase has pledged to use a new funding round to boost its struggling customer service.

German Financial Regulator Clarifies Stance on ICOs

The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) has clarified its position on ICOs
22 February 2018   28

German financial regulator admitted it was receiving many inquiries about the status of tokens and cryptocurrencies. According to an advisory letter, BaFin provides some basic definitions of ICOs and related terms. It is important because the results of a new survey showed that more than two-thirds of Germans know about bitcoin.

In this letter, BaFin educates the public and explains how tokens are typically generated, how blockchain works and that ICOs are used to raise funds for startup projects. The note states that for regulatory purposes, ICOs, tokens, coins, and cryptocurrencies are subject to the existing provisions in the field of securities supervision and other relevant national and EU laws.

The authority advises participants in ICOs to check and follow rules applicable to regulated financial instruments, such as securities. If businesses or individuals have any doubts about regulations, they should approach BaFin.

According to BaFin, companies should fulfill any obligations under the Banking Act and the Capital Investment Code, the Insurance Supervision Act and the Payment Services Supervision Act. The transactions may be prohibited if relevant regulatory requirements are not met.

The authority also states that legal classification of tokens requires precise examination. It will determine their status on a case-by-case basis after studying their features. The token should be transferable and tradable on cryptocurrency trading platforms in order to be classified as a security.