Coinbase is facing criticism due to long delays in processing Solana (SOL) transactions, with some users waiting over 14 hours. This has raised concerns about the exchange’s liquidity and operational methods. Many users suspect that Coinbase may be staking their SOL without permission, leading to delays when large withdrawals require unstaking.
Users have reported frustrating experiences, with some transactions pending for more than a day. An investigative journalist shared that their transaction was canceled after waiting 24 hours. There are suspicions that Coinbase is using deposited SOL for staking to earn yield, which could explain the delays.
The situation has worsened since the FTX collapse, which exposed risks in centralized exchanges. Users are increasingly demanding Proof of Reserves (PoR) from Coinbase to confirm its solvency and operational integrity.
CryptoCurb, a notable figure in the crypto community, accused Coinbase of staking customer funds without consent and called for immediate PoR audits. He criticized the industry for neglecting PoR reforms after the FTX incident.
Whale Alert, a blockchain-tracking platform, has noted large SOL transactions from unknown wallets to Coinbase, fueling liquidity concerns. Coinbase Support attributed the delays to technical issues, but industry insiders suggest the problem lies in Coinbase’s infrastructure, which struggles with Solana’s fast transaction speeds.
Additionally, Coinbase’s largest Solana validator is set to unstake 567,000 SOL, valued at about $130 million, raising questions about whether Coinbase has enough liquid SOL to process withdrawals.
This scrutiny of Coinbase’s custodial practices is not new. Recently, BlackRock modified its Bitcoin ETF filing due to concerns about Coinbase’s role as custodian. Investors are asking for on-chain proof of Bitcoin purchases for transparency. The filing noted that Coinbase Custody must process withdrawals to public blockchain addresses within 12 hours of client instructions, given a confirmed minimum balance.
Despite launching Bitcoin-backed loans for USDC, Coinbase’s ongoing SOL delays and liquidity issues have led to skepticism about its transparency and reliability. Users are demanding clear evidence of Coinbase’s financial health and business practices.
