Warning: Coinbase will reverse your completed transactions without notifying you

TL;DR: Coinbase is allowing transactions to fail in a way that deceives users in to believing that their transaction has actually completed, and has communicated to me that this is a totally normal and OK way for a transaction to fail. This could affect any Coinbase user and I think most users would agree that there is no excuse for allowing a transaction to fail in this way without notifying the user with an alert or email. This needs to be fixed.

Did you know that Coinbase will reverse your completed transactions without notifying you? I sure didn't.. until it happened to me. On May 10th I completed a sale of ETH for USD and received a receipt of completion from Coinbase, as always, showing the details and indicating that my transaction had completed successfully:

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My Transaction

Upon seeing the transaction complete, I logged out of my account. I returned to my account nine days later to see that, instead of having USD in my account as I should, I had ETH (which is now worth ~40% less than the USD that I should have). I checked to make sure that I did actually sell my ETH. Yep, the transaction is still there. But now there's an additional transaction in my history which I did not initiate:

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Strange Transaction

What is it? How did this get here? I don't know.. all it says is "From Coinbase" and a "Note" which clearly references the previous sale of ETH transaction which it reversed. Did Coinbase do this? Why? Did they do it on behalf of someone pretending to be me? I had no idea, but it must be some kind of mistake or something, it shouldn't be there. I immediately contacted Coinbase support about an unauthorized transaction on my account and they responded by disabling my account and telling me how to secure my account while they investigated. I was worried and thought my account may have been compromised even though I had no reason to believe that it could be other than this strange transaction.

Three weeks later.. yes, three weeks, I finally get an answer:

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Coinbase Support Email

According to Coinbase support, my transaction was "canceled". But my transaction wasn't canceled. The trading UI gave me a clear indication that my transaction completed successfully in a receipt of sale. It had a reference code and everything. I've seen transactions fail on Coinbase before, and when it happens you are told immediately in the transaction dialog box that the transaction failed and definitely did not complete. But that's not what happened here.. the Coinbase trading UI communicated the complete opposite of a failure, that the transaction had completed successfully.

It seems that Coinbase is saying that even if the Coinbase trading interface gives you every indication that your transaction has completed successfully, it may still be canceled after the fact. And not only can it still be canceled, but it will be canceled without notifying you at all. No alert on your account, no e-mail notification. Nothing. All that will happen is that a transaction will show up in your transaction history which reverses your previous transaction. So now you have to inspect your transaction history to see if your successfully completed transaction has been reversed? If it is reversed, will it show up in your transaction history in a few seconds? Minutes? Hours? Who knows! Also notice that this transaction says nothing about your previous transaction being canceled or failing, and your previous transaction still says that it completed successfully.

Coinbase seems to think that this is a totally OK way for a transaction to fail on their platform. What do you think?

I think that you can't just reverse people's transactions without notifying them, especially after giving them every indication that their transaction completed successfully. It's not right. And if Coinbase insists on reversing people's transactions after telling them that it was successfully completed, at a bare minimum you must notify them with an alert on their account and/or an email. But that didn't happen.

Even if you have limitations on how transactions can fail, you can always add an alert or email notification for the user if the transaction must fail in this way. This is a clear and unambiguous, negligent oversight by Coinbase. It's just amateur. There should never be an inconspicuous transaction failure. There's no excuse for it. Absolutely none.

Coinbase should fix this clear oversight in their transaction protocol, but since they have indicated in emails to me that they have no interest in fixing it (or the consequences that it has had on my funds), I have no choice but to post about it here.

Email exchange with Coinbase Support, case #06206268: https://pastebin.com/F5DsPAQD