Coinbase, one of the largest cryptocurrency exchanges, is having an issue with Ethereum (ETH) funds. Last month, after Ethereum’s Shapella upgrade went live, allowing withdrawals for the first time, many validators withdrew their coins from the Blockchain staking mechanism. However, validators who withdraw funds to wallets held by the US crypto exchange Coinbase were in for an unpleasant surprise. Here are the details…
Unpleasant surprise for cryptocurrency on Coinbase
As cryptokoin.com reported, the Shapella upgrade on Ethereum went live last month, allowing for the first time withdrawals of staked coins. Thus, most validators opted to withdraw their cryptocurrencies from Blockchain’s staking mechanism last month. But some validators who have withdrawn funds to wallets hosted by major US crypto exchange Coinbase have been in for an unpleasant surprise. Appropriate technical support was not available to receive these deposits, so the funds were stuck.
A customer support representative said, “Our systems currently do not support deposits from external validators to Coinbase ETH addresses. “Until we support these transactions, funds may remain stuck,” he said. A number of users have posted on Reddit their concerns that their asset balances do not reflect ETH staking withdrawals in Coinbase wallets. For example, ETH staked by Zelda, the Ethereum validator of cryptocurrency platform CoinDesk, became withdrawable on April 25. However, this validator also appears to be among those affected. McKenna Otterstedt, senior vice president of product communications at Coinbase, explained that there was a “technical issue.” She confirmed that the company’s teams are “working on a solution,” she said.
Important questions left unanswered
He declined to elaborate on how many users were affected or how much ETH remained in uncertainty. Coinbase offers its own staking services, including public validators owned and operated by the Coinbase Cloud. According to blockchain analytics firm Nansen, staking requests on Coinbase “currently constitute the largest amount of ETH in the withdrawal queue.” According to the data, 40 percent of the withdrawal queue comes from requests on Coinbase. That is, Coinbase’s own staking services account for the largest amount of ETH in the withdrawal queue.
Coinbase’s customer support stated that it does not recommend trading ETHs that are “stacked in the Coinbase ETH wallet until this issue is resolved”. He said they do not specifically recommend configuring these ETH rewards or removing withdrawal requests. As a result, Coinbase did not have the proper technical support to receive these deposits. This resulted in a tightening of funds. As a result, a number of users shared on Reddit their concerns that their asset balances do not reflect ETH staking withdrawals in Coinbase wallets. While Coinbase confirmed it was a technical issue, it declined to detail how many users were affected or how much ETH was stuck.
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