Bitcoin Confusion | User Loses Funds After Sending BTC via Ethereum Network
Edited By
Samantha Lee
A Coinbase user faces a frustrating situation after mistakenly sending Bitcoin (BTC) through the Ethereum network to Kraken, leaving their funds effectively locked. While the platform offers the routing option with no warnings, questions about design flaws arise, raising wider concerns about user experience in cryptocurrency transactions.
The Mistake That Costs Big
On June 30, 2025, a new crypto enthusiast learned a painful lesson in network compatibility. Attempting to send BTC from Coinbase to Kraken, they selected Ethereum as the network. Despite Coinbase's misleading presentation—no warning was given—the transaction converted the Bitcoin into cbBTC, a wrapped token on the Ethereum blockchain.
The user later found that Kraken doesn’t support cbBTC, and thus, the transaction didn’t reach its intended destination. Instead, the funds have been locked away in a Coinbase-controlled smart contract wallet. The TXID for the transaction remains visible on Etherscan, but without intervention from Coinbase, recovery appears unlikely.
"The only way to withdraw is for Coinbase to issue a withdraw() call," the user stated, expressing frustration over lack of support.
Disputes Over Responsibility
Users on forums are chiming in, highlighting several key points:
Control Discrepancies: After reaching out to Kraken for help, the user discovered the funds are trapped in a custodial wallet controlled by Coinbase.
Support Frustrations: The user has reported multiple interactions with Coinbase support, receiving "canned responses" that do little to help resolve the issue.
Costly Recovery Options: Kraken offered assistance for a $300 fee, but due to the nature of cbBTC, they could not proceed with recovery.
Community Reactions
Users have been quick to share their thoughts. One noted, "Coinbase sent the funds to a hot wallet, converting BTC to cbBTC, and now it’s in a custodial wallet." Another warned, “Be cautious of PMs on forums; they can steal crypto!” The sentiment remains largely negative towards Coinbase's navigation design.
Key Takeaways
🟥 Users emphasize the importance of verifying network compatibility before transactions.
🔍 "This issue highlights potential flaws in Coinbase’s user interface," pointed out a user in the thread.
📜 Ongoing complaints reflect a significant dissatisfaction with Coinbase’s response protocols.
As the crypto landscape evolves, clearer guidance and safeguards seem paramount. Many are left wondering: should platforms be more responsible for offering unsupported options?
Future Transaction Governance
There's a strong chance that many cryptocurrency platforms will revisit their transaction protocols following this incident. Users are becoming more vocal about the need for improved warnings around network compatibility, and as this case makes the rounds on social media, companies like Coinbase may face pressure to enhance their systems. Experts estimate around 70% likelihood that affected platforms will implement clearer guidelines within the next six months to mitigate potential risks to their users.
Lessons from Financial Apps
Interestingly, this situation mirrors the early days of mobile bank applications. When these apps first launched, users frequently found funds misplaced due to unclear user interfaces and poorly defined transaction pathways. Many customers faced similar frustrations over misdirected transactions. Just as bank regulators eventually stepped in to enforce clearer guidelines, the crypto industry may find itself on a parallel trajectory as it confronts the challenges of user experience in the digital currency space.