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- Coinbase has been accused of staking customers’ funds following Solana (SOL) transaction delays.
- A renowned developer has explained that the exchange’s infrastructure may be struggling to keep up with the rapid transaction speed of Solana.
Coinbase has faced serious backlash from the crypto community for a significant increase in the number of transaction delays. According to reports, some users claimed to have waited 14 hours to send or receive SOL, raising questions about the liquidity of the exchange, as mentioned in a CNF report.
Delving Into the Complaints and Alleged Reasons
On the X platform, one Coinbase user complained that his SOL transaction was canceled after a day of pending status. Fascinatingly, this led to speculations that the exchange might have staked customers’ SOL without their concerns. According to one user, this delay may be a result of unstaking, which implied that Coinbase needed to fill its reserves to enable the facilitation of transactions.
So, deposit SOL to Coinbase. They take your SOL and stake it to earn yield off your deposits, and oops, if everyone wants SOL, all of a sudden, they don’t have your liquidity? Is that what they are doing?
Speaking on the SOL transaction challenges, a popular X user identified as CryptoCurb demanded immediate Proof of Reserve (PoR) audits. Taking a similar position as the other users, CryptoCurb suggested that Coinbase could have likely caught up in staking customers’ funds. According to him, this would be a big issue if confirmed to be true.
Adding more “fuel to the fire,” tracking platform Whale Alert highlighted that multiple transactions had been facilitated from unknown wallets to the Coinbase exchange. Based on the report, one of the transactions involved 214,835 SOL ($50,868,025). Later, another transaction involving 344,501 ($81,108,777) was sent to Coinbase. Prior to that, $227 million worth of SOL had been transferred to various Centralized Exchanges, per a CNF report.
Other Possible Reasons for the SOL Transaction Delays
Analyzing the situation, a renowned developer called Mert Helius linked the situation to Coinbase’s internal infrastructure and its struggle to handle the transaction speed of Solana.
This has nothing to do with the chain [Solana]. My guess is they just can’t keep up with the tip of the chain because they generalize their indexing to all chains but don’t account for how different those chains are.
Meanwhile, a user called Sidehustle believes that the transaction problem is a result of the exchange running out of liquid SOL. He also pointed out that Coinbase’s largest SOL validator was on the verge of unstaking 567,000 SOL ($130 million).
Did they run out of liquid SOL and are now waiting until the epoch boundary to push through withdrawals?
To respond to these issues, Coinbase announced on X that it was facing technical challenges. The exchange also apologized for the inconvenience and assured users that they were working to restore full operation.
Hi there! We understand your concern and apologize for the delays in sending/receiving SOL. These delays are due to technical issues, or blockchain issues. Our team is actively working to resolve the problem. Please check our status pages for updates. Thank you.
Amidst these concerns, the price of SOL reached a new all-time high of $294, per a CNF report. However, the price has declined to $239 at press time.
