How law enforcement uses blockchain to catch criminals
CNBC’s Eamon Javers reports on how blockchains work and how they can help law enforcement agencies in solving cryptocurrency crime. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
For Tanja Vidovic, it was a moment of panic: She had received a series of alerts about someone changing access to her cryptocurrency account. And she realized, as she stared at her computer screen, that nearly all of her $168,000 in holdings was gone — vanished before her eyes.
She was stunned.
Nearly four months have passed, and it has yet to sink in, she said.
Tanja and Jared Vidovic jumped into cryptocurrency investing in 2017 and watched their funds nearly quadruple over four years.
The Vidovics used Coinbase, the country’s largest cryptocurrency exchange, for their plunge into the virtual currency. On exchanges such as Coinbase, users can deposit U.S. dollars and trade them for cryptocurrencies, such as bitcoin and ethereum, which the couple purchased.
“I looked into Coinbase, and it seemed like it was one that everybody used and trusted,” Tanja said.
The growing investment was a welcome boon for the Safety Harbor, Florida, couple and their three children. But in late April, Tanja, a firefighter, opened her computer to a barrage of security alerts and password change notifications.
“I signed onto the crypto. And I said, ‘It’s gone,’” Tanja said.
The Vidovics said they tried to contact Coinbase but they couldn’t get anybody on the phone.
Interviews with Coinbase customers around the country and a review of thousands of complaints reveal a pattern of account takeovers, where users see money suddenly vanish from their account, followed by poor customer service from Coinbase that made those users feel left hanging and angry.
Making the issue even worse, cryptocurrency transactions cannot be reversed, according to the FBI. Experts say once criminals access an account, funds can be drained in minutes.
Coinbase, which went public in April, has a market cap of about $65 billion, has more than 68 million users in 100-plus countries, more than 2,100 full-time employees and $223 billion in held assets, according to the company.
“Hopefully, Coinbase going public and having its direct listing is going to be viewed as kind of a landmark moment for the crypto space,” CEO Brian Armstrong told CNBC in April, when the company went public. “People no longer need to be scared of it like in the early days.”
While the cryptocurrency exchange company has grown rapidly, complaints have continued to arise. Since 2016, Coinbase users have filed more than 11,000 complaints against Coinbase with the Federal Trade Commission and Consumer Financial Protection Bureau, mostly related to customer service.
Former employees told CNBC the company’s customer service practices shifted over time, with representatives struggling to keep up with demand.
Source: CNBC Television YT
