What is left of Coinbase without the compliance bonus?

Author: Fairy, ChainCatcher

Within the moat built by regulatory advantages, Coinbase is the "golden signboard" in the field of compliance. But without the halo of compliance, its "noble indifference" is becoming more and more dangerous.

Community feedback is ignored, customer service is slow to respond, and handling fees are high....These problems have disappointed and dissatisfied more and more users. A question is becoming increasingly acute: If there is no compliance dividend, what is left for Coinbase?

Where are the individual users?

According to CryptoQuant data, Coinbase's individual investor dominance index is only 18.3%, far lower than Binance's 89.6% and Bitget's 50.1%. This index reflects the activity and influence of individual investors in the exchange relative to institutional investors. The higher the value, the greater the proportion of individual investors in the user group.

Behind this data, Coinbase has long focused on compliance and institutionalization, and it also shows that it is gradually drifting away from ordinary users, and the platform's appeal and stickiness to the mass market are declining. This has also been widely reflected in the community. Whether in the Chinese community or the English community, the negative comments about Coinbase are increasing, and the voice of users is getting higher and higher.

Image source: CryptoQuant

Coinbase's "Accounting Metaphysics"

Some users reported that when two transactions were processed in the same block, the Coinbase system might only account for one transaction, and the other transaction would take several days to recover after a fight with customer service. User @0x4848 said: "I said it was a bug, and they said it was a feature to protect the safety of funds."

This kind of "in the name of security" problem, if there is no efficient and transparent processing mechanism, will become an overdraft of user patience and trust.

Customer service: Slow is the norm

Coinbase's customer service system has long become a "complaint concentration camp". Many users have reported that Coinbase's intelligent assistant is useless and cannot really solve the problem.

Once you choose manual customer service, the nightmare of waiting really begins. Manual customer service has very low authority and can often only "record problems and give feedback upwards". According to user feedback, it takes at least 48 hours to receive an initial response, and it may take a week or even longer to completely solve a problem.

In addition, some users say that its customer service communication mechanism is chaotic and inefficient. "They keep emailing me back and forth asking for the same information, I provide it, and they say it's not enough," said user @MattLGov. "Dealing with Coinbase customer service is absolutely terrible."

Image source: @0xPonga, @MattLGov

There are fraud hunting outside and employees crossing the line inside

Coinbase users are frequently targeted by fraud. Chain detective ZachXBT revealed that related cases last month alone caused a loss of up to $46 million in funds.

At the same time, data security issues also broke out within Coinbase. Mike Dudas, co-founder of The Block, said on the X platform that he received an official email showing that an employee may have illegally accessed some user account data, including himself. The email wrote: "We have detected signs that an employee may have viewed a small number of customer account records in a way that is inconsistent with internal policies." (Related reading: Losing $300 million a year, Coinbase users are frequently scammed, and there is an "insider" behind it who leaked information?)

The indifferent style of "read but not reply"

In terms of user communication, Coinbase's presence is almost zero. It is not open to retail investors, nor has it established an effective user communication channel. Whether it is the CEO or the senior management team, they rarely respond to user questions publicly on social platforms. Even when faced with a large number of complaints and doubts, they rarely come forward to clarify or explain.

This "silence" may have its cultural background and regulatory considerations, but the result is that the user's voice is difficult to be heard.

Image source: @WutalkWu

"Aristocratic" handling fee

User @hyperunit sorted out the cost of buying 1 spot Bitcoin at the initial handling fee level of mainstream exchanges, and the results showed that Coinbase's fee reached $329.68, which is at a relatively high level. In addition, community user @Tmzhao1 pointed out that if you want to get the same handling fee level as ordinary users of Binance on Coinbase, users need to start from VIP 0, complete a transaction volume of about $250 million, and pay a cumulative handling fee of more than $300,000.

Although Coinbase Pro (now Advanced Trade) offers lower fee options, its interface is relatively complex and many ordinary users are not familiar with or easy to use.

Image source: @hyperunit

Coinbase's compliance halo is undoubtedly the cornerstone of its firm position in the US market. However, as it continues to increase its reliance on institutions, it seems to have gradually weakened its connection with ordinary users. On this road of pursuing compliance and security, Coinbase is quietly sacrificing user experience and giving up the fine polishing of platform operations and services.

Behind this giant ship, there are scattered whispers and expectations of countless users, whose voices are gradually swallowed up by cumbersome processes and indifferent mechanisms.