Coinbase, the U.S.'s largest cryptocurrency exchange, admitted that it had incorrectly told 125,000 customers their security settings had changed.
CNBC reported Monday that the company, which is listed on Nasdaq and publicly traded, said it was due to an internal error.
CNBC spoke with Andrew Schmitt, a spokesperson for Coinbase. He stated that Coinbase spent most of the weekend talking to customers to answer their questions. "We believe transparency is the best way to build trust and respect with our customers.
This incident follows a CNBC report a week ago about widespread complaints from Coinbase customers who had their accounts hacked. They were then unable to reach anyone at the company to assist them. Coinbase stated that it was working to improve customer service. It launched voice support for customers whose accounts were taken over by third parties this month and will add live chat later in the year.
Customers received the security-settings emails at 1:45 PM PT Friday. The email stated that the 2-step verification settings had been modified. Investors were confused and alarmed when this message appeared. They believed their accounts had been hacked.
Coinbase sent another email stating that the notification had been "sent in error." In a tweet, the company stated that it had "experienced a notification deliver issue that sent SMS texts and email notifications alerting customers about their account 2FA settings being changed."
"Our team quickly began to work to identify the problem and stop these erroneous messages. These erroneous notifications were stopped by our team at 3:07 PM PST. "We recognize that this caused confusion," the tweet stated.
The company stated that it would continue to work to regain the trust of all customers who were impacted by these notifications.
Schmitt, the spokesperson for the company, stated that the issue was not caused by a hack but an internal error. The system suddenly started sending out messages like a bug, but it wasn't malicious or malicious.
CNBC spoke with Don Pirtle (a retired 53-year old police officer) about his concern when he received an email from the company on Friday revealing that his two-factor authentication was compromised. He claimed he was afraid of being hacked into his Coinbase account.
"I was afraid to death. I reached out to my daughter and her boyfriend. I reached out to my daughter and her boyfriend. Pirtle replied. Pirtle said, "I thought, ‘I must sell this before my lose the money."
He said that he had sold crypto, an investment he made for his grandson, $60,298. It's now a question of safety.
Coinbase went public in April. According to the company, it has over 68 million registered users, 2,100 employees and $223 million worth of assets.
