Coinbase Users Facing Cryptocurrency Withdrawal Delays up to a Week

Users attempting to withdraw digital assets from their Coinbase accounts are facing unexplained delays, according to sources in contact with CryptoGlobe. The users in question are U.S.-based, and no reports have surfaced of similar delays for non-U.S. customers.

The withdrawal delays are reportedly affecting all Coinbase assets. Several users reported withdrawal delays of up to a week, and that the delays had been occurring for two weeks.

There are no reports of the delays being mirrored on the Coinbase Pro platform, Coinbase’s institutional trading platform formerly known as GDAX.

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Chequered Past

These recent reports are nothing new, as the San Francisco-based tech firm at the center of the crypto industry has faced serious and repeated allegations of holding users’ funds since late 2017, when cryptoasset prices exploded.

CryptoGlobe and many other news outlets reported this summer on the raft of unanswered allegations from angry and distraught customers, which comprised 134 pages worth of complaints filed to the U.S. Securities Exchange Commission (SEC).

A Coinbase representative told CryptoGlobe at the time that the delays had been due to unexpectedly high trading volume, causing downtime during the dramatic runup in cryptoasset prices during late 2017/early 2018.

The company has recently taken steps to rectify this fault, reportedly upgrading its transaction and “surge” capacity by “1000%” earlier this year, as well as hiring hundreds of new employees.

In August, Coinbase’s trading volume was reported to have plummeted up to 83% since the January peak, making overcapacity an unlikely explanation for the present delays.

Coinbase, a U.S. company founded in 2013, also offers services in a total of 30 other countries. The supposedly $8 billion company has apparently had trouble attracting institutional investors, having recently discontinued its high-net-worth index fund product, itself only launched a few months ago.

Former Coinbase VP Adam White, the fifth employee of the company, recently departed his position to join Bakkt, the New York Stock Exchange-backed cryptocurrency venture set to begin offering physically-settled bitcoin products in November.

Overstock CEO Sells Shares in His Company to Invest in Blockchain Projects

Patrick Byrne, the chief executive officer of Overstock.com (OSTK), has recently lashed out at investors who questioned his sale of 900,000 of his ‘founders shares’ in the company. Justifying his move, he revealed he needed the funds to invest in blockchain projects.

According to Business Insider, Byrne recently sent a letter to shareholders after the company’s stock prices plunged over 21% this week to their lowest since 2012, after he revealed he sold 500,000 of his shares earlier this week.

On Friday, the CEO revealed he sold an additional 400,000 shares, meaning he sold over 15% of his stake in the company. Although Overstock’s shares recovered on Friday, May 17, Byrne’s letter to shareholders was notable. In it, he wrote:

I simply had to supplement my nominal salary with stock sales in order to fulfill personal commitments to invest personally in blockchain projects such as Medici Land Governance, along with a need to meet charitable pledges.

The CEO added that he doesn’t plan on giving such an explanation again, justifying that he owes shareholders “staying within the law and not making decisions based on inside information, not explanations of my life and projects outside Overstock.”

He noted that the “unanticipated stir” caused by his sale was unexpected, and added “I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labor and my property to pursue my ends in life.”

Byrne is notably Overstock’s largest shareholder, and noted he told investors a year ago he would be making “significant sales” to fund different projects, including those related to blockchain technologies and, presumably, cryptocurrencies.

In fact, the libertarian sold 775,000 of his shares in September of last year, before this week’s sale. The stock’s price has fallen roughly 90% from its record high in January of 2018, when Overstock was benefitting from its cryptocurrency ventures and accompanying the cryptocurrency market’s performance.

In November of last year, Byrne revealed he had plans to sell Overstock’s retail business and go “all-in” on cryptocurrencies and blockchain technology. The CEO’s plan would see the company focus on its fully-owned subsidiary Medici Ventures, which has been invested in blockchain-related startups, after selling its retail business.

Overstock's price performance over the last two yearsSource: Yahoo Finance

Byrne has notably been battling short sellers targeting Overstock, as the firm competes with the likes of eBay and Amazon. Financial analytics firm S3 Partners has estimated short bets against it stand at $157 million, or 50% of its float. This makes it more targeted by short sellers than 99% of companies in the U.S.

Despite the company’s performance on exchanges, Overstock has since launched its tZERO security trading platform, and was one of the first companies to pay a “portion” of its taxes using bitcoin in Ohio.