I don't think they're maliciously delaying the delivery of bitcoins. I just think they need to hire more customer support reps to deal with problems like these in a timely manner when they arise.
1. Was there really a delay because price could have slipped below what they quoted and they were hoping for a better rate before executing? If so, they committed an act of bucketing.
2. Next, if they tried executing a trade was it a limit order or a market order? It should always be a market order unless the client requests otherwise by specifying maximum entry price etc. Its still under the purview of bucketing.
3. Did they execute the transaction (or transactions in case of a fills on a market order) and fail to deliver due to a technical or human error? If yes, this could be classified under kiting and bucketing. Also they should have never quoted a rate unless the transaction took place, as this in itself means that the trade has been executed.
4. Did they segregate the funds until the transaction was complete or did they pool it with other funds that may have been used for other transactions (trades and withdrawals)? If they were not left untouched and were not segregated this would construe as kiting if only used for trades. Worst case it would be classified as a Ponzi-like operation.
Its quite easy to ensure that these illegal situations do not arise, it usually happens to good people with good intentions who have a lapse of judgement or loose control of their emotions and subsequently have a loss of common sense.
edit: formatting
If you look at: http://i.imgur.com/R2qEn8E.png
They clearly quoted a transaction price for the BTC conversion. This price should be calculated as:
=> (rate at which the bitcoin have Already been purchased) + (costs incurred by coinbase) + (fees owed from client)
The rate Can Not under any circumstance be quoted unless the transaction has already been executed.
If the trade(s) were not executed, Coinbase broke laws that they are governed by regardless if bitcoin is regulated or not.
If the trade(s) were executed, Coinbase still broke laws(albeit different ones) that they are governed by regardless if bitcoin is regulated or not.