Coinbase Criticized for Allegedly Staking Solana Without Consent
Coinbase, the largest U.S. cryptocurrency exchange, criticized by users for processing severe delays Solana (Sol)trade.
Users reported waiting more than 14 hours to send or receive SOL, raising concerns about the exchange’s liquidity and operational practices.
Concerns grow over Coinbase liquidity issues and staking practices
Coinbase users have expressed widespread dissatisfaction with transaction delays. an investigative reporter report Canceling their transaction after a full day of pending status. another user shared They had two transactions stuck for more than 14 hours.
There are growing claims that Coinbase may be staking customers’ SOL to earn revenue without their consent. Some have speculated that the delay may stem from the unstaking process, which may require operating reserves to be replenished before the trade can be executed.
“Deposit SOL into Coinbase, they take your SOL and stake it to earn income from your deposit, the bad thing is, if everyone wants SOL at the same time, they don’t have your liquidity,” one users Summarize.
The incident comes as industry skepticism grows. FTX crash. the whole saga exposed serious mismanagement and Centralized exchanges (CEX) lack transparency, and critics say the latest model is reminiscent of that incident.
CryptoCurb, a popular user on X, question Coinbase’s solvency and requires immediate proof of reserves (go through) review. He also critical The industry appears to be abandoning PoR audits, a key reform measure introduced after the FTX collapse.
“It looks like Coinbase is very likely staking customers’ SOL without their consent. If confirmed, it won’t be okay,” user wrote.
Blockchain tracking platform Whale Alert further fuels skepticism marked Multiple large SOL transactions from unknown wallets Coinbase Exchange.
Whale alerts flag transactions to Coinbase. source: Whale Alert on X
Amid ongoing SOL transaction delays and large transfers, users are urging Coinbase to provide clear evidence of its liquidity and operational integrity. Coinbase support responded Users complained, attributing the delays to “technical and blockchain issues.”
However, prominent developer Mert Helius blamed the delay on Coinbase’s internal infrastructure, which struggled to cope with Solana’s fast transaction speeds.
“This has nothing to do with the chain (Solana). My guess is that they just can’t keep up with the tip of the chain because they generalize the index to all chains without taking into account how different the chains are,” Helius clarified.
Another user, Sidehustle, noted that Coinbase’s largest Solana validator will unstake 567,000 SOL (worth approximately $130 million) by the end of the current cycle.
“Have they run out of liquid SOL and are now waiting for the epoch boundary to push withdrawals?” he question.
This is not the first time Coinbase has faced scrutiny for its custody practices. recent, BlackRock files application to amend its IBIT Bitcoin ETF Due to user concerns about Coinbase’s custody service. Investors are calling on Coinbase as a custodian to provide on-chain proof of ETF Bitcoin purchases to ensure transparency, BeInCrypto reported.
“Subject to confirmation of the minimum balance required above, Coinbase Custody shall process the withdrawal of digital assets from the custodial account to a public blockchain address within 12 hours of receiving instructions from the customer or the customer’s authorized representative,” excerpt from the document read.
In addition to this controversy, Coinbase also Recently launched Bitcoin-backed loans from USDCeliciting mixed reactions from the crypto community.
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