Bitcoin Forum

after my friends and I have made many transactions through COINBASE I have realized that once they take that coin deposit, if bitcoin goes up in price, you will not get your coins for the price you planned on getting, they simply reverse your payment and make you try again, so they are basically taking the difference between the number you thought you would get and what the current value is, I wonder how so many people buy into coinbase but yet it must be written in their disclaimer somewhere. Its like a ponzi scheme. They will only take your business if they are profiting otherwise, reversed lol! What a brilliant idea, beats day trading!


Eager to hear what everyone has to say ^^

Yes they do this all the time but it is not a Ponzi scheme. I have a feeling you don't even know what one of those is.

 :o i guess "ponzi scheme" means any sort of scam that dupes consumers these days

http://en.wikipedia.org/wiki/Ponzi_scheme

Hmm... I guess I'm one of the lucky ones then. Before I was fully verified I had the 6-day waiting period like all un-verified members. I have always received my BTC at the quoted price when I clicked the "Buy" button although I didn't receive them until 6 days later. The best example for me was when Silk Road got busted, for a period of about 3 hours BTC plummeted to about $80. I bought a BTC at that price. 6 days later the price had rebounded to about $125. I received my BTC at the $80 that I bid at with no problems.

You have a feeling? Thats not good. Ponzi scheme is the same thing as the social security system in the United States, that should clarify it nuf' ;-P

Investors pull Ponzi schemes all the time, paying off people with new investors funds. I was trolling saying ponzi =P

Issues w/ Coinbase... I doubt they are scam by how they are set up. But they also promise so much I don't think they can deliver on their promises.

Trance,

Sorry for the confusion here. We use machine learning algorithms to prevent fraud and they're not always 100% accurate. If you feel you've had a transaction cancelled incorrectly send support an email. We regularly review transactions and push them through at the original purchase price upon request. I also wrote a bit about our fraud program in the fourth section here:

http://newsbtc.com/2013/11/07/coinbases-olaf-carlson-wee-answers-questions-users-technical-issues/

Hope that helps!

Dear lord... "machine learning algorithms" you might just as well say you use computers given how broad this is. Even the most closed things have their bases published, like the basic page ranking algorithm used by Google.

What is your training set for this ? How large is it ? Did you buy it or construct it yourself ? What methods did you use to train and test the secret machine learning methods you are using ? Is anything of you doing new, or is it just the typical SVM, some trivial decisions trees or what ? There are so many questions to be asked here.. and none of them will get answered, because it is so secret... It is really a shame that people build such closed services over bitcoin and, even worse, people use that.

I have been seeing alot of these complaints. I have never had any issues myself with coinbase other than I tried to verify credit card and they never charge my card so I cant have access to bitcoins too easily. My only complaints from my end, besides that they seem pretty decent and have good customer service if you need it. Wondering how many of you saying this have new accounts because I see that is the case most time. Remember people coinbase has to eat a loss if they are defrauded. Its like selling gold bricks, most places dont want to deal with anything but fiat. You have to give them a break on this 1.

It's not only happening to new customers. I'm a Level-2 fully verified Coinbase user who has made several successful buys and sells in the past few months without a hitch. And then, suddenly, my orders are getting canceled as "high risk."

Now, I don't believe that Coinbase is defrauding customers or engaging in shady business practices. I trust what Olaf is saying, and I believe they will make things right. It's been five days with no response from customer support, but I understand they are busy and likely very overwhelmed.

I have no reason to believe they won't make things right for me, whitelist my account, and push my order through as the original exchange rate. Despite the stress of the situation (the opportunity cost of my canceled orders is big for me), I must be patient and not go off the rails as many people have. Coinbase seems to be lacking customer support power at this time, but that doesn't mean they aren't an honest, trustworthy company who will make things right if only we're patient.

Coinbase has a reputation to hold up as pretty much the only real BTC exchange/vendor for the USA. Im sure they are flooded with high volumes of new people at the moment with the way the market is exploding. Its what we get being the 1st real bitcoin clients, im sure they will adapt to the growing numbers of business. Olaf if you guys need any help via marketing and PR shoot me a pm! Broken veteran with alot of time on my hands...lol

Good idea. Whenever there is an issue do more marketing, the problems will magically go away...

I responded to Coin Base and they basically said "sorry you had a bad experience"

I basically mapped out the scam to them and sent it as a response showing my evidence.

Essentially COINBASE uses "Customers" 'cash/bank deposits' as loans to purchase BTC.

When BTC drop in value AFTER the order is placed, COINBASE goes ahead and executes the transaction and earn the small premium off of the listed price when the order(s) are issued. If BTC go up in value, COINBASE cancels the orders and pockets the amount GAINED from the inflated price that occurred during the "Wait Period" customers are required to wait for their coins to be deposited.

I purchased a few BTC at $220 per/BTC, the hour before the BTC were to be deposited, Five days later COINBASE cancelled my order, claiming that "the account appeared to be of fraudulent nature" which was entirely NOT TRUE. After doing some personal research of my own this happens to be a common occurrence amongst other COINBASE customers. Essentially, COINBASE uses customers bank accounts as their own 'Piggy Banks' to purchase BTC @ low prices and sell them at higher prices...Enough said.

"What do you say to the folks that suggest you cancel orders when the price of Bitcoin goes up?


We have a very complex machine learning algorithm which determines the probability that a particular user is purchasing bitcoin using a stolen identity – this helps keep the bitcoin community safe from fraudulent activity, protects non-bitcoin users from identity theft, and protects Coinbase from monetary loss due to fraud. This algorithm only applies to purchasing bitcoin with dollars and does not apply to sells or any bitcoin-to-bitcoin transactions. The price is not a part of this algorithm – we have an equal proportion of flagged transactions when the price goes up or when the price goes down. When user purchases get flagged and the price has gone down, they actually save money, and rarely say anything about it. However, when user purchase is flagged and the price has gone up, people are admittedly angry because they have lost money – this latter group is much more vocal, which gives people the impression that we only flag transactions when the price goes up. If someone thinks their transaction was flagged incorrectly, they should email support – we regularly review transactions and by request can push the transaction through at the original purchase price."


-Sounds like Obama =P

Between me and my wife's accounts, we have had 1 successful buy out of 3.

My first order was cancelled and support threw the TOS in my face.

My wife's first order went. Second was cancelled AFTER the promised fulfillment date. We've started contacting support. Depending on the response, I may be interested in getting a form of legal mediation going. So far the TOS is full of contradictions from actual practices.

It is all ok, a 13 years old child can use coinbase just fine. I'm sure they are following every rule there...

..

Don't worry! Many are taking action against the company COINBASE, Based out of San Fran, eventually the scheme will be up and those in charge will be held accountable!

Out of curiosity, do they cancel transactions if BTC price drops? Would be convenient on their part.

Exactly! They will only take your business when its literally ONLY / ALWAYS in their best interest :)

I am starting to lose faith in this company. I don't know if Rees or Olaf will ever respond to me.  :(

Try sending Olaf a message through this forum's PM system.

Don't want to be just another "me too", but had to add my two cents.

Like everyone else that posted here, I had some transactions go through and some that did not. When my transaction did not go through, I sent a message to support (a very non-happy one). Surprisingly, they responded. It was the algorithm response that others have heard, but at least they responded. I replied with some suggestions on how to improve their service with better communication and an understanding of what it feels like from this end. Namely, they have my bank account info, my credit card info, my bit coin and my money, but yet they maintain that I'm the one that trying to do a fraudulent transaction. With all the info they have on me, what possible fraudulent activity could I be engaging in? Instead, one is left with the impression that they are fraudulent ones.

*sigh* I really want to like Coinbase because of the web plugin they have for merchant services. But if I am experiencing this, I don't want to subject my customers to it; so, for now, I am pulling it from my site.

P.S. I did PM Olaf last week and have not heard anything.

I PM'ed Olaf too last week and haven't heard anything.

Like you, Jesterize, I really want to like Coinbase (I used to love them) and was going to implement their merchant services on some client sites. But now I'm hesitant and won't move forward until further notice.

I hope they get things worked out for all of us, but as I said earlier, my faith in Coinbase is slipping.

I sure am glad Olaf and the guys at CoinBase could come on over here and give their customers some relief from wondering what exactly is going on with their money..... o wait that was 4 days ago and he just gave a copy and paste response in here...

Coinbase.... continuing to base customers.

Lol yea. Olaf isn't responding. Got my PM nuffsaid?

Right, because


This doesn't make it any better than another Ycombinator failure (http://trilema.com/2013/ycombinator-continues-to-suck-jointly-and-severally/).

Really?  That's not what Rees told me:

I am extremely sorry for the confusion on this. I've taken further steps to review your account and at this point we've been able to get you whitelisted. Any future purchases you make from this point forward will not encounter this cancellation. Unfortunately, since the refund has already been sent out on these original purchases, I'm unable to push through or re-create the original transactions.

Again, I apologize for the frustration this has caused. If you need further assistance please let me know and I'll be happy to help!


You're not being honest Olaf.

Whitelist? Jesus, just to join the place they vette you like beocoming the president. You add a bank account and they make two small deposits which you need to confirm. Once that is done they should have NO reason to suspect anything is wrong, you just went through their process and passed. Same thing with a credit card. They make two small deposits. You confirm what they are and they confirm. Same thing with your phone. They call your phone with a pin# that you enter on the site. Now they have THREE ways they confirmed it is the correct person and yet they still select people as being fraudulent. What is this shit?

Shady and disorganized

Coinbase is a sham. I too was "vetted" by their system and was buying from them without incident until they forced the backup credit card scheme. Now they have numerously charged my backup credit card AND my bank account but yet canceled pending bitcoin purchases due to "high risk"?!!!?? Bullshit! more likely cancelled because they didn't like the lower price I bought at. At this point I consider it a HIGH RISK to buy from coinbase… They are getting too powerful in this supposedly decentralized arena of bitcoin. They are not even an exchange, the only reason everyone started using them is because they were the first that made your bank account available as a deposit source.

They do selectively scam people, that's a given. My deposit made it to my bank, but it was three days late. But where was that money in those three days? Who was using that money? Getting the possible interest on it? Next time I purchase bitcoin or sell bitcoin for that matter, I will maybe choose Dwolla. I'm confirmed and up to par there. Its too bad, because their system has the potential to be very good and be a bitcoin users dream....but instead of making things work and being a shining star of the bitcoin community they opt to choose shady practices and lousy service. Too bad.

O yea, the FORCEFUL action of making you add your credit card is pretty pathetic too. They basically tell you that you can't do anything with their service if you don't add your credit card and/or blood.

Be VERY careful when using this service and DO NOT store or hold ANY of your bitcoin there.

I dont want to say scam, ill just say.. not as honest as I would like.

The amount I clicked accept too was not the amount they charged me, the amount they charged me was more then what I agreed too and over drafted my account... made a support ticket and nada.

thanks i was gonna buy through them but dont anymore.  i hope they get more justice than the FTP owners did