Coinbase Global (COIN -4.00%) has a new Chief Marketing Officer, and she's going to have her hands full. The leading cryptocurrency exchange announced on Friday that it had hired former Facebook exec Kate Rouch to be at the helm of Coinbase's marketing efforts.
Rouch was the Global Head of Brand and Product Marketing for Instagram, WhatsApp, Messenger, the namesake Facebook app, Public Affairs, and the Facebook company itself. Facebook was reaching 3.51 billion monthly active people across its products at the end of June, and the social networking giant has had to tackle its fair share of controversies and user-polarizing debates.
She's a great hire for Coinbase. However, she might be getting more than she bargained for with the fast-growing crypto exchange.
A token of lost love
Her timing couldn't be worse for her or better for Coinbase. CNBC ran a story on Tuesday, detailing how everyday users are seeing hackers drain their accounts dry. Unlike traditional banks that tend to have live customer service and make their swindled customers whole, it's a whole different ball game in the wild world of crypto.
Coinbase users have been posting complaints of fraudsters zeroing out their crypto for years, as well as the poor customer service on behalf of Coinbase. It's not just Coinbase failing its users, but as the top dog it's going to be the one that gets the most attention.
It's impossible to rifle through the official Coinbase channel on Reddit without tripping over posters detailing alleged fraud on the platform. Even on Facebook -- Rouch's old haunt -- there's a group of more than 1,300 members that claim to have been scammed on the platform; they gather to pool resources, best practices, and lessons learned.
Coinbase knows it needs to get better about responding to its users when things go wrong. It has an automated feature to lock your account, but more often than not it's too late. Coinbase offers tips to limit the hack to your Coinbase account, but there is no live person you can reach instantly to talk through the thievery incident. Last month Coinbase announced that it plans to offer live chat messaging and phone support later this year, and it will also expand its customer support team. In short, Coinbase is ready to act like a financial services powerhouse commanding a $52 billion market cap.
There's a lot at stake if Coinbase gets it right. Business is booming, with revenue soaring nearly 11-fold in its latest quarter. With net margin clocking in at more than 40% before a one-time benefit through the first half of this year, it's easy to see why this seemingly overvalued stock could be a bargain, trading at a forward earnings multiple in the teens.
However, the future doesn't happen if Coinbase can't navigate the choppy waters of the present. Some of the customers that have been swindled may be negligent, but hackers are stepping up their game to catch more than just the gullible these days. Tech-savvy fraudsters can take control of a user's phone number through SIM swapping to jump through Coinbase verification checks, and then it's off to the account-draining races.
The world is wondering: Is cryptocurrency a good investment? The question becomes moot if crypto isn't a secure investment.
With 68 million verified users on its books, the percentage of customers that have been duped on Coinbase is low. However, if they are about to get loud, it could hurt the credibility and reputation of Coinbase as it tries to market to an even larger audience. Welcome to Coinbase, Rouch. Settle in, but don't get too comfortable. There's work to do.