Bitcoin Forum

The coinbase website looks pretty legitimate.  The team has a great resume.  I'm just wondering if people here have mostly successful transactions with them and how many problematic transactions with them.  I know there have been several cases where transactions have been canceled and tagged as "high risk transactions" by the system, and had to be corrected manually.  Now obviously this is a small % of cases.

My feedback so far-- Site display is easy to read and pleasing to the eye.  Bugs- the verify credit card.  It does not work, shows error messages, etc.  Verifying a credit card is good, because it allows instant buy (10/month)

The bank deposits are still pending for me, so i will get back to its timeliness.

Please give your feedback in this thread, because if coinbase becomes error free, this will be huge for USA people. 

Ive had a few issues with them but they have taken care of me in the long run. I am a fully verified customer of theres. So far ive been pretty happy with them.

Been using them for 6+ months. I was fully verified until they changed policy a few weeks back.

Overall I really like what they are doing and will continue to be a loyal customer for the foreseeable future.

FYI,
They only take visa credit cards for verification.

Gotta agree with this fella. Coinbase certainly reliable. I too was enjoying the level 2 verified status until they started requiring users to setup visa credit card as a backup.

+1

Only problem I had with them was resolved through a single support ticket.  Otherwise they were very understanding when we accidentally funded from the wrong account (two accounts on file) and had to refund them for a significant purchase once everything cleared.  Great company, only people we trust for moving fiat.

Bank transfers seem to be working smoothly.  Their support is lacking, but that should get better with time.  I'm wondering how does credit card verification work.  They say they will make a small charge to verify on the credit card.  Did anyone get that small charge?

Overly long drawn out validation process, cancellation of 7 day purchase orders (twice!).  Nothing but frustration so far trying to use them.   At this point why even risk using a company based in the US.   

If you are not a level 2 it does take some time. Please give them alittle time.  :)

Let's give them a chance.  All canceled orders have been resolved in the past based on what i've read.   They have a lot of investors and a good team.  And i'm pretty sure they are compliant with US laws. 

3 cancellations so far. I plan to keep trying to buy one bitcoin every couple weeks just to see if they ever fix their software.

I have had good luck with them and was also fully verified until visa card backup was required. Your transfers will take a few days but they have always worked for me.

Best Regards,

Update:
You can use a visa debit card to validate yourself to level 3 and obtain instant purchases again.

I just tried to do this with my Fred Meyer pre-paid visa debit card but too no avail :/

I'm going to go ahead and open up a support ticket because this waiting for 3-5 days for your BTC is for the birds.

thats becuase its a pre-paid..

I have only used coinbase to sell but I have used them several times. I was also fully verified before the credit card thing showed up. As I lack a visa card I am now not as fully verified. It's ok with me. The limits aren't limiting me yet.

I have always gotten my money. I have never had money withdrawn from that account.

I can't speak to the buying side but I can say that selling through them works great. Money in my account in a few days.

I just got an email saying that an order was canceled, that it was high risk transaction.  Hopefully the fix this, because they already took the $ from my bank several days ago.

I've done about 10 transactions totaling about 250 BTC over the last couple of weeks.  No problems at all. 

Do you have to now link your card too to be instant? My bank info is already in there, and now my credit card info! seems scary.

got my last 3 transactions canceled and getting a stupid email saying it is high risk and "better luck next time".

Also, tried sending 11 btc's and .95... the .95 went through within an hour... the 11 has taken over 4 hours, nothing yet, even though in the pending area, it says this transaction will go through in 1 hour.

Multiple transactions with them, no issues, though most of my transactions (aside from one or two small tests) were selling BTC.

hell ive sold and buy bitcoin from them and no issue. well execpt my very first time i try to buy bitcoin but sent them an email and all was squared away.

this is getting frustrating.  I am getting a bit anxious.  Does anyone know their merchant support phone number?  I know they don't have a support phone number for customers.

Hey, I kind of have a problem with coinbase at the moment. I haven't bought any bitcoin for a while using coinbase recently and finally decided to make a purchase. Well, I didn't realize they changed policy... I didnt even receive an e-mail about the policy changes. So now I made an 800$ purchase and have to wait a week to get them? BS!!! I e-mailed them to cancel the order.

I thought I was level 2 and all that. Do you guys think I should  go withdrawal my money out of an ATM right now, so I'm not at a loss of my cash? A week is a long time for bitcoin, and especially since it's 200 dollars per coin.

Hopefully somebody responds tonight.

It tells you ahead of time when you will receive your bitcoins.  So it is actually your fault.

for me, I made 3 transactions and expected it to be processed by the agreed upon date.  On that date, at the last minute, I receive emails saying that all 3 orders have been canceled.  This is after they have taken the money out of my bank account for several days.  I initiated the original transactions almost 2 weeks ago.

This is what I expect for a "reputable" company that they claim to be; give BTCs at the originally agreed upon price, and pay interest for holding my bitcoins/money against my will.

This is annoy especially after I already initiated successful transaction in the past.

I guess you can put blame on me, because I admit, I didn't really read the prompt. I wasn't really blaming coinbase for this either. I just assumed the process worked the same as it always did in the past, and was really surprising when that didnt happen. I just think a simple courtesy e-mail of policy changes should be in order. I think most legitimate businesses do that, right?

Thanks for your quick response, I think I'm just gonna take my money out of the ATM and deal with canceling my order and overdraft, if that happens.

Do keep in mind that now if you want bitcoin instant you need to be a level 2 plus a credit/debit card on file

Verify a Credit Card "Instant Buy 10 BTC / week — Level 2 required"

Also, coinbase REALLY need to rephrase their high risk transaction letter:


I will give an update on how they handle this.

I did try this, but keeps coming up with an "address does not match" error. I googled, and apparently one other person had tweeted coinbase having the same error, but got tweeted back with the response of "please send a support ticket e-mail," (he said he sent two e-mails and got no response for a while from what he implied) and there was no update that I know of about this. There was also talk of this error on reddit that I saw, but nothing with what can fix this from what I read. They are probably working on it..

I only saw this thread now, but I searched for something like it and missed this one before starting a similar one in the service discussion section.

My biggest complaint is that I did not find it very easy to understand their methods before signing up.  I wish they (and damn near every other service) would make a better FAQ and more detailed terms available before signing up.  Had they done so, I would have become a customer sooner.

It took me only like three business days from when I signed up to when I had made a sale and had money in my bank account.  And the price seemed fair as well.  Very cool!

I am particularly sensitive about sending my identity document scans out.  I choose to do so in Coinbase's case because they used real names for the principles and don't seem to use a foreign shell company or try to obscure their domain.  As it happened, I didn't seem to need to supply my identity papers for what I wanted to do anyway.  At least so far.  (Logic indicates that hooking up to a bank, or even sending a wire for that matter, should eliminate questions about identity and reporting, and it seems that Coinbase has figured out how to leverage that.)

Support has gotten back to me in a few days for both questions/issues I've had.  I do wish they had a more formal ticketing system though.

I wish they had a way to sign documents with a sending key, but I probably would not choose to use Coinbase as an on-line wallet even if they did.  Maybe they have this feature, but I've not found it nor have other users who I've asked.  I didn't bother to ask support.

All around I give Coinbase high marks, but I use if for limited things and am a new user.

Agreed.  Seriously, guys?  Who wrote this shit?

I've never received this particular letter (I generally sell BTC through Coinbase and it's been excellent for me), but if I had, I'd be pissed!

Does your fuck you letter have to be that offensive?  Hire someone who can write.

ETA:  Also someone who can spell.  "Preventitive?"  WTF?  Hint, it has a goddamn A in it.

I hate to be naive, but are there any educated guesses about what types of things Coinbase means by 'high risk transaction', and what sorts of potential risks they are supposedly attempting to guard against?

---

I didn't really see the mail as being highly offensive.  A bit amateurish compared to the more familiar legalese, especially the spelling error, but not necessarily insulting in and of itself.

I cold see it being somewhat infuriating to have very few clues about the problem and thus no way to rectify it unless somehow the details of the attempted transaction make it obvious.  It makes some sense for Coinbase to be circumspect about this, but I would hope that for the benefit of the innocent, things would be a little more clear.

I should emphasize that I use Coinbase myself and think they're one of the best BTC services available to Americans.  They've also implemented two factor authentication pretty well.

Still, that high risk email is downright goofy.  If you just tried to do something normal and got turned down, you're already going to be pissed off, so the email telling you why you just got shafted really shouldn't rub salt in the wound.  And that's exactly what it does.  It calls you an idiot and then misspells shit while doing it, then basically concludes by saying "better luck next time LOL."

It would be hard to design a worse "fuck you" letter.

Ironically, that was one of the things I didn't care for.  For one, it can be a bitch for one who lives outside of cell phone range.

For two, I don't consider my phone reliable enough from a security perspective to have anything to do with access to any financial related web site, and I don't even let it access my real mail.  Of course allowing it to receive access codes is not going to allow it to be used as a sole attack vector, but the attacks that I worry most about would be highly sophisticated ones where an attacker could compromise all of my communication methods simultaneously.

Anyway, I hope they eventually allow users to make their own choice about OTP.  I never trust any institution with more funds than I can afford to lose, and have a special checking account to hook up to their service such that Coinbase could not be used as a vector to siphon money out of my mainstream bank account (in quantity.)

see this thread:

https://bitcointalk.org/index.php?topic=322229.0

Thx for the pointer.  I actually have been following it.

It remains unclear in my mind exactly what types of things can trigger a cancellation, and I would dearly like to know.

It is a completely valid hypothesis that cancellations are nothing more than a stop-loss on Coinbase trades gone sour, but the argument against it is that it would make little sense for an outfit which is well capitalized to ruin their reputation for a few peanuts on a 10BTC trade.

A hypothesis which strikes me as more likely is that Coinbase relies on various triggers and flags which are generated 'upstream' in the bowels of the USD financial services system.  This is a much more interesting area to me generally and is why I am keen to discover any reliable information about these cancellations that I can.

but they cancel the transactions after the money has reached their end.  they are not receiving any new information, except money.  a good way of doing that would be to deny the transaction to be taken place altogether.

It isn't a few peanuts though.  $800 off one customer is quite a lot.  They've got a 300k customer base.  So there are lots of "peanuts" to be gathered.  They said it themselves, "We don't get it right all the time." 

Fair point.  The best way to explore that would be to identify if it is systemic.  Hard to do without a random sample of user's providing data though.  Alas.

Also, just by implementing a "high risk transaction" system that does not discriminate, it will still guarantee that they profit and the customer loses, because bitcoin prices in general is going up.  For example, say the high risk transaction system randomly flags 5% of all trades and returns it, they will profit more in the long run because of the trend of bitcoin.  This is assuming the high risk thing doesnt discriminate.  If it does discriminate which it probably does at least a lil bit so people don't notice, they make even more and customer gets shafted more.

The deciding factor for what is high risk and what isn't should be the money that reaches them.  As far as I know, there is NO extra info that they will have gathered by the money reaching them.  Hence, they could very well flag a transaction as high risk BEFORE taking one's money, but they don't do that.  They cancel it after they receive the money and have 2 choices: release the bitcoins or keep the bitcoins and send the money back to your account.

I give them props for their AML and anti-fraud systems, which are why those limits exist. I was maxing my buys through them for awhile, and started getting hit with those high-risk letters. Complained to customer service, talked to them a bit, and they whitelisted me so I don't get hit by that. Really liked that level of customer service. I know my mainstream bank doesn't give it to me, no matter how much cash I run through/store in their system.

The anti fraud system called "high risk transaction" is an intricate system to defraud the customer.  The reason is because you don't gain any extra info by receiving the ACH transfer that would dictate the chances it would be fraudulent.  Verification of bank is all the info they have and they could very well reject prior to taking the money.

Once you're Tier 2 verified, Coinbase is the most fantastic bitcoin buying and selling experience out there. If you have a US bank account, I highly recommend setting up a Coinbase and getting a transaction under your belt to get into the 30 day waiting period for Tier 2 verification as soon as possible. If you don't have an account yet, use my referral link here to sign up (https://coinbase.com/?r=51dc61a4c6d4c7bcbc000019&utm_campaign=user-referral&src=referral-link) and we will both get $5 worth of Bitcoin when you initiate your first transaction of 1 BTC or more (buy or sell). Win, win!

Although I have not been flagged by their AML/AF system, I have been following these various discussions with interest.

While financial institutions are required to implement such a system, I, personally question their implementation. Having worked in both iSec and Banking fraud, I fully understanding the complexity of these systems... which primarily rely upon actuarial data and pattern/trend analysis to detect money laundering and/or fraud.

The primary problem I see with this implementation is that the filter is being applied after the fact. That is, rather than applying the filter prior to attempting to execute the transaction, they are applying it after the funds are withdrawn from the customer account. This leads me to wonder how much they truly understand about these sort of systems. And importantly, how little they seem to understand with regard to consumer perception.

That being said, the way these systems "should" be implemented is fairly simple.

Joe customer attempts to execute a buy/sell. The AML/AF filter should be applied before they try to execute a transaction with his bank, at which point, if he is flagged, he would be notified that the transaction did not complete, and why. Moreover, if the system is executed correctly, it should have less than 5% false positives. Though, if Joe customer is fairly new, there will not be enough data to necessarily correctly raise an alert. It is the over-time transaction activity of Joe customer that these systems monitor. For example, if Joe customer is a merchant, then his transaction activity will reflect commerce patterns. Whereas if he is a bitcoin speculator, his transaction activity will reflect stock market speculation patterns.

Regardless, the number of positives, true or false, should be low enough for their fraud team to review. Although, I suspect, given the small size of their company, they do not have a fraud team, and are relying upon a fully automated process. Which in turn, is likely playing a role in the seeming high number of false positives.

The aforementioned is, of course, nothing more than an oversimplified hypothetical, as I have no idea how this particular company has implemented their AML/AF system. I only have the 10K foot view based upon various customer complaints that have been posted to the forums and elsewhere. Nonetheless, from my pov, I do think this company needs to spend some time revisiting and revising their implementation. But that's just my opinion. And you know what they say about those.

As for claims that they are defrauding their customers? Serious claims, those. And, imho, wholly without merit.

And finally, as for the speed (or lack there of) of receiving BTCs, once purchased? That is one of the unfortunate challenges (that is company independent, btw) wrt mainstreaming bitcoins. Simply due to the irreversible nature of BTC as opposed to their reversible fiat counterpart.

@vrhax:  Interesting stuff.  Thanks for it.  Couple of comments/questions.

I'm a big fan of providing good feedback, but I can also see an argument for being a little circumspect with information about why, exactly, a flag was triggered.  This of course because it would be useful information for someone who is genuinely guilty of attempted fraud to adjust their methods.  How is this normally dealt with?  Is there a sort of a financial industry standard?

I suggest that it might be difficult to pick an all around number for false positives because some environments have a higher incidence of fraud and generally more persons who are proficient at it.  Bitcoin is likely one of these.  I could see it being the case that a system which got, say, 5% false positives might let an excessive number of false negatives through.  Thoughts?

For starters, Oracle (yes, I know, teh big evul! lol) has published a nice overview wrt AML (see Best Practices for Anti Money Laundering (AML): System Selection and Implementation (http://www.oracle.com/us/industries/financial-services/062008.pdf)). In this day of fast paced technology, it is a bit outdated, but still a comprehensive and well thought out piece.

As for the feedback bit? I think the rather poorly written "high risk: your transaction has been reversed" notification, should be rewritten. For starters, imho, it comes across as neither professional or knowledgeable. Yes, it is important not to "give away the farm" so to speak. Even so, there are ways to avoid revealing "trade secrets," while still helping the customer understand what triggered their system.  But that would require them to understand how their system is implemented. And honestly, that email does not lead me to believe the writer actually understands that bit.

As for how it's normally dealt with? It varies within and between industries, of course. Take credit card companies, for example. If your spending behavior deviates from "your norm" you may receive a friendly (usually an automated voice system [AVS]) call from the credit card company asking you to confirm recent purchases. If not, your card will be frozen, and you will be asked to speak to a real person who will basically do the same as the AVS, with the additional benefit of actually being able to ask them what triggered the process. At which point, they will likely explain that, for example, the sudden flurry of charges and diverse locations, triggered their fraud management system [FMS].

In the case of bitcoin transactions, my guess is that extremely large transactions could potentially trigger their seemingly "trigger happy" system. But that is primarily a guess based upon the various reports I've read. Even so, they do face a challenge that most banks do not. And that is the irreversible nature of bitcoin along with its distributed p2p transaction implementation. In fact, I strongly suspect that is one reason they've implemented their own "internal" bitcoin setup, which, if executed completely within coinbase, never touches the block chain.

And finally, as for false positives? This is where the AML/fraud department comes in. Their job is to investigate flagged transactions to determine whether it really meets the risk criteria. Importantly an experienced and well-trained AML/fraud team will be able to weed out most false positives, leaving the overall stats at under 5%.

As for false negatives? There really is no such thing. If a customer manages to complete criminal transactions without being flagged by the system, that would be considered a weakness in the system. And no system is fool proof and they're always evolving... as will coinbase, as will any company dipping their toe in the bitcoin waters.

Case in point (from the dark ages). A group of convicts figured out the credit card numbering scheme, proceeded to create fake credit card numbers, and made several mail order purchases (like I said, dark ages). There was not much that could be done from a prosecution pov. After all, they were already in jail. What did occur, however, is that little 3 digit number that is now printed on the back of cards... used to verify that yes, it is a valid card. That, along with the expiration date, and, in some cases, the customer's address, helps to reduce fraud.

My review of coinbase.

I did quite a bit of research before deciding to go with coinbase. The criteria I used to make my choice included but was not limited to, the following:

Trustworthiness: Their funders played a huge role wrt my perception of their trustworthiness. That they are headquartered in San Francisco also played a role. The bay area tech industry is a fairly small circle and reputation is everything. That they were able to acquire funding from y-combinator was/is huge, imho.

Verification process: This process is quite simple, and similar to paypal's bank verification. Once you provide your bank routing/account numbers, they make 2 small ACH deposits, and of course, withdraw the sum. Once these deposits appear, it is a matter of clicking on their verify bank link, and entering the deposits. The deposit order is important. So, if they don't verify the first time around, change the order. They should verify at that point. This process is the same for their visa card.

Once your bank account is verified, you can purchase BTCs. One thing I am not crazy about is that if you want to purchase partial BTCs, say, $50 worth, you have to play around with your BTC value to get as close to $50 as possible. It would be great if they allowed you to fill in the dollar amount the way bitstamp does.

After you've executed your purchase, you must wait 5 business days for the BTCs to be credited to your account. This is done to ensure your bank transaction completes. ACH transactions take 3-5 business days, depending upon your financial institution. Which is why they chose the max before crediting your account with BTCs.

Additionally, once you've executed our purchase, a sort of 30 day count-down clock begins. You are not considered fully verified until after 30 days has passed. The primary reason for this is to ensure you do not attempt a charge-back against their company.

Once you've completed this level of verification, you can add a credit card (VISA only) to your account and verify that. This will place you in the level 2 verification status, allowing instant BTC purchases.

This process can be frustrating to the new customer, esp in this day and age of, gimme nao!1! However one could think of the overall process as a bi-directional trust protocol.

BTC to fiat process: This was a huge one for me. In the event I want to convert BTCs to cash, I did not want to have to deal with the headache of over-seas wire transfers. So, being able to hook up my bank account (I set up a separate account from my primary) was a huge factor for deciding to go with coinbase. I have both purchased and sold BTCs without any real problems. In fact, the process is very much like paypal. Which makes it quite convenient.

Okay, that's the up side of coinbase.

The down side? Their fees seem to be higher than other bitcoin businesses, though, they're not exorbitant. The biggest downside, imho, is the BTC prices. The buy prices appear to be tracking MtGox, while the purchase prices appear to be tracking bitstamp. So, you end up with anywhere from a $3 to $10, and even greater, variance (i.e, buy: $215 sell:205). As such, I am less inclined to make a habit of purchasing BTCs through them.

In summary, I think coinbase is pretty decent. Esp now that they've released an iPhone app (yeah, I'm a macgeek). The few times I dealt with their customer service as I was learning the ropes of their process, have been educational and pleasant. So, my overall rating of them is 4.5 stars out of 5 (minus 0.5 stars due to the BTC pricing).

The 30 day verification process sucks, it's really not fun to buy BTC and not have access to it for 5 days, but once you're Tier 2, they let you transact a rolling 10 BTC instantly, which is awesome considering that the ACH takes 3 days to hit your bank account, i.e. they are operating completely on good faith that you have the funds in your account that you say you have. I bought 3 BTC from them yesterday around 8pm and as of this moment I can instant purchase 7.3; this number will be 8 by 8pm tonight. This instant BTC is not your total buy limit for the day, they let you buy or sell up to 50 BTC a day, but these larger transactions will not show up immediately and available for use in your wallet beyond your available instant balance.

The buy price and sell price on Coinbase are both unique, loosely tracking a couple dollars above bitstamp but significantly below Mt. Gox. They are essentially market making here, you are the price taker, no limit orders.

I'm probably fairly unusual among their customers in that I don't buy Bitcoin, but do sell it, and every one of those transactions has gone smoothly.  From the recipient's perspective, there's basically no way to defraud them.  I also have a credit union account I use solely for BTC-related transactions so if anything weird happens, it won't mess up my other finances.

I started the verification process but the bank account verification says that the two deposits do not match their records. I sent a sup ticket on friday morning but have yet to hear anything. Not the greatest first experience with them. I will update this when I get things worked out.

Try it again, only change the order. That worked for me.

when you sell on coinbase it takes 4 days for them to pay you! freaking stupid!  I set up a bitpay account and get it the same day now!

buy through coinbase - sell through bitpay!

coinbase aint gonna make it like this!

This is a violation of Bitpay's TOS just so you know. Bitpay only allows merchants to accept bitcoin for goods and services.

Who gives a fuck how long it takes to get money into a bank account?  Only people who are living completely hand-to-mouth as far as I can see.  For my part I would be perfectly happy if it took several weeks as long as it is reliable and predictable.

So far I have made a small experimental sale and a somewhat larger one in the $3k range.  I very much appreciated the unambiguous and easy to find estimates of when the funds would be available.  It was like 4 or 5 days.  In the fist case my money was actually available the next day.  In the second case, the money was available several days before their estimated 'by' date.

i am a merchant. i just bought something from myself! and bitpay made a profit from it!

There appear to be major problems at Coinbase at this time. 

I had a sale of 50 btc from Oct 29th where the money was suppose to hit my bank account on Friday Nov 1st that did not arrive.  Today I had another 40 btc and a 33 btc sale where the money was suppose to arrive in my bank by this morning fail to arrive.

That is a total of 123 btc in outstanding sales where Coinbase failed to deliver the funds.  I opened a support ticket on Nov 1st and have had no response.

Same here. 40BTC and 20BTC

Don't like the sound of that.  The occasional delay is one thing and anyone has that.  Ignoring support tickets for four days?  Two of those were the weekend, but keep us updated.

It's amazing price is going up and no one can buy or sell coins.. Coinbase makes bank.. I bought price went up and they cancelled my order and refunded my money... Kept the coins and profited..

You all are selling, price goes up wait a few days to process... Profit

These guys are straight crooks.  Took me over 4 emails and 3-4 weeks and threatening to go to reddit before they responded.. Response?  "Sorry mistake in fraud detection we've white listed your account.."  Never offered to honor the coins we agreed on... Never doing business again with these thieves

Evidently deposits to bank accounts are not working atm...?

Repost

This doesn't explain why I am still waiting on a deposit that was suppose to be complete on Friday Nov 1st for the sale of 50 btc.

I bought bitcoins from them on monday, they said the coins will be mine on friday. The withdrawl has yet to post my account. I am starting to worry. Is anyone else having issues buying coins?

If you're a first time buyer, it takes about a week for everything to clear.

Ya this is my first time with them. I am just a tit concerned since my bank has not received any transactions yet. The coins are suppose to be here by tomorrow Friday the 8th. I have verified both my phone and identity with them as well.

Yea, it'll arrive on the dot. That's usually how it's been with first time buyers.

Coinbase is legit.  I've never had a single problem with them, and whenever I need help, I can either send a support ticket or ask on IRC (and I get very fast responses).

There have been a few people with bad cases, but I'd imagine they get hundred's of support tickets a day.  I don't blame them for missing one or two.

Also: For the visa card verification, they only accept visa DEBIT cards, IIRC.  No credit cards.

I tried placing my first order with them this past Thursday night (10/31) after verifying my bank account and cell phone and attempting to start credit card verification as well.  It was for a single Bitcoin.  On Monday morning, the funds were withdrawn from my bank account via ACH.  This morning (Thursday), however, I got the following email:


What the fuck, Coinbase?  You have the money.  If you think the transaction is high risk, just hold the coins for 30 days or whatever.  Don't simply take my money (which they still have...) and say, "oops, we're sorry!"  That's bullshit.  I have no idea what could possibly have flagged my transaction as high risk, and had they used any of the sensitive data I provided them with to verify my identity or check my credit, they would have found that I'm extremely low risk.  I realize that the price of Bitcoin has risen dramatically since I purchased last week, but that should not factor into their risk calculation.  Unfortunately, it seems it must be a factor.  There is no other explanation that I can think of.  What they've done now is essentially take out an interest-free loan courtesy of me.

I sent them an email/support ticket as soon as I woke up and read my email this morning to ask what happened, but I've gotten no response back.  As far as I'm concerned, Coinbase is a scam.  If the price of Bitcoin rises after you purchase, they may mysteriously decide that you are "high risk" and thank you for the week+ long interest-free loan.  If the price goes down, they don't refund the difference.  Anyway, all I can say is that they appear to be wholly untrustworthy and scammy.  I will not do business with them again.  My biggest regret, assuming I get my money back eventually, is that I had to give them all my personal information to learn this lesson.

Thanks for clearing a little of my worries. Friday is here, ill let you know when my coins arrive.

My second non-trivial sale posted to my account.  This time I first saw it Friday morning, and Friday was the last day of the 5 day estimate.  Value was in the $3k-$4k range.  I've got another similar sale in progress, and it is estimated for the middle of next week IIRC.

So far I've not triggered any flags it seems.  I'm squeeky clean as far as illegal things and fraud, but I have bought a variety of relatively expensive things with cash lately (an excavator, a pickup, etc) so I half expected my accounts to be flagged.

I know when I have been scammed:

https://bitcointalk.org/index.php?topic=328013.0


An agreement was made. 9.25 btc for $1,945.07. They have reneged on that agreement and kept $3000 worth of bitcoins, while returning $2000 in fiat currency.

If they think there is an issue with my money, I would be willing to let them hold the bitcoins longer till they felt that the transaction was safe or non-reversible. This is not about fraud prevention. This is about reneging on contracts when the btc are going up in value.

Coinbase is located in California. If they refuse to honor their contracts, people need to get together and form a class action lawsuit against them.

A good test of this hypothesis will be to see if roughly the same number of flags occur when the price is going down.  There are several main difficulties here.

  - we need the price to be going down, and even then, it would be possible that algorithms have become more advanced leading to a lower false positive rate.  I will say that Coinbase seems to be big enough so that if systematic exploitation along the lines of the mechanisms you describe were taking place, I would expect to see even more complaints of the nature you have suffered.

  - complaints on bitcointalk.org is a very poor source of random sample selection.  Those who are more vocal, and those who have suffered a loss, are much more likely to speak up.  Similarly, it is not unheard of for business, and especially those who are scams, to invent sock puppets to pump their service.  This is in fact one of the best indications of a scam in my observations here over the years.

My problem is not the seemingly random cancelling of contracts on a market that is mostly going up. Obviously, any study of the transactions would appear to show a bias in their favor, but correlation does not prove causation. I will give them the benefit of reasonable doubt on this particular issue.

My problem is that they do not provide a means to honor a transaction. If they think a transaction is fraudulant, they could just hold the bitcoins until they feel that the transaction is not fraudulent. They do not provide any means for this. They are profiting by canceling transactions.

This is the main issue.  They take people's money and then cancel their orders.  If the problem is that they fear chargebacks, then they could simply present an option of waiting 30-60 days or canceling the order and getting a refund.  Instead, they are canceling orders automatically.  That is scammy behavior.  The "high risk" transaction in this case is allowing Coinbase access to your personal information and funds for a week or more to do with whatever they please.