Bitcoin Forum

Yesterday I logged into Coinbase for the first time in about 4 months and was met with this message:

Unfortunately we have had to close your Coinbase account. Before your account can be closed, you will need to withdraw your bitcoin to an external wallet and any other funds to an attached bank account. Please be sure to delete any references to bitcoin addresses generated by Coinbase, as bitcoin sent to those addresses will not be retrievable once the account is closed. If you have any questions you may contact us at support@coinbase.com.

Transfer 0.00007033 BTC out of your Bitcoin accounts
Enter a Bitcoin address to which we will sweep all of the funds from these accounts

I wrote them an email at the support address but have not heard back yet. 

Anybody else experience this?  I am suspicious, possibilities I am worried about:
1. This is an elaborate scam of some sort
2. USG is cracking down on Coinbase
3. Coinbase is having internal issues and about to shutter like Mt. Gox

?

Mt Gox was insolvent. If coinbase allows you to withdraw successfully, they aren't insolvent. Have you violated any of their policy? Are you using their service solely for the wallet or you also use it as an exchange?

Well I tried to withdraw the tiny amount of BTC I have there but I kept getting error messages, despite being certain that I was doing everything right.

I have no violated their TOS as far as I know.

The bulk of my coins as in cold/paper storage i.e. offline.  I only use Coinbase as an exchange.

Banks do the same kind of thing with "inactive" or "dormant" accounts. I sometimes wonder if this is not just to encourage people to use it, to generate income from fees or if it has

something to do with financial regulations like AML/KYC. Whatever the reason, it still is a pain in the ass. Did you verify your account, or did you probably have difficulty to this?

Here is a topic on the subject --> https://bitcointalk.org/index.php?topic=500704.0

I cannot be sure, but to me the problem seems to be that you hold a very small amount of Bitcoin there / use it too little and they just want to save resources.

Both excellent points -- dormant account, very little coins in there.  Ok so no reason to be suspicious then?

I will post their reply here as soon as I get it

Coinbase does not close accounts because of inactivity, but for violating their terms of service. Check their list of prohibited activities (https://www.coinbase.com/legal/user_agreement#appendix-1:-prohibited-businesses-and-prohibited-use) to see if you violated the User Agreement. For example, you cannot use Coinbase to buy bitcoin and then sell on LocalBitcoin, or send bitcoin from a gambling site to Coinbase and sell for fiat.

That makes sense, but I did not violate any of those TOSs.  I'm just a regular Joe trying to make a buck.

Agree, I've had a Coinbase account for close on a year if not more, don't think I ever used it or might have once to send some funds as a test.

Account still active with no problems. So don't think it was closed due to inactivity, if so mine must have been closed ages ago.

Please let us know when you hear back from customer service, may have been an honest mistake.

When I saw this



I guess you use coinbase account to receive many small amounts of Bitcoins from faucets. This would make sence for closing the Coinbase account

No they never close account for receiving many amounts of bitcoins from faucets because I am using this for long time and my all payouts from faucets I have never any problem

12 posts in regards to a 3cent account balance
.00001000=$0.0039~ now
.00007033=$0.00274~ now

2cents and 74 decimals of a cent.

i think chilling out is cheaper then wasting time arguing about such a small amount

I am using Coinbase account for small transactions and as pocket money on my android phone. Never had problems, just their transactions can be slow from time to time. Most possibly you get from or send coins to some gambling site. They ban for that cause of their regulation.

I have a decent amount coins in cold storage, I'm considering cashing in some at some point through Coinbase (which is linked to my bank account).  That is why it is important that my Coinbase account be active and stable.

See Coinbase response below.
1. I never got emails from the on 2/16 or 2/23
2. If there were a "high volume of transactions" that something funny is going on b/c that was not me

I will respond to her and answer her questions and report back

NOV 05, 2015 | 09:41AM PST
Danielle replied:
Hi [anonymized],

Danielle here, with Coinbase Compliance. On February 16, 2015, we sent you a request for additional information regarding your Coinbase account as part of a routine compliance review. We followed up on our request on February 23rd, 2015, but did not receive a response. Accordingly, your Coinbase account was restricted pending your response.

I have gone ahead and copied our request below, for your convenience. If you would like to continue using our service, please respond at your earliest convenience:

During a routine review, we noticed your account has conducted a high volume of transactions. Please know that we are required by law to periodically review high volume accounts as part of being a regulated Money Service Business.

In order to assist in this process, please provide the following information within seven (7) days to avoid disruption of service to your account:

- Please identify the email addresses of any additional Coinbase accounts you may own
- Briefly describe the primary use case for your Coinbase account
- Describe the source of the bitcoin being deposited into your account that was not purchased through Coinbase
- Identify the source of funds for your purchases of bitcoin
- Elaborate on the nature of your outgoing transfers and what service(s) they may be related to

If you would like to discontinue service, an easy way to clear out that last bit of money without having to deal with fees would be to donate your remaining bitcoin to a non profit that accepts bitcoin such as Khan Academy. Kham Academy is a non-profit aimed at providing a free, world-class education to all. To donate, direct your remaining bitcoin to donate@khanacademy.org via the Send/Request page. Please specify the amount you’re sending in BTC, rather than USD. For example, if you have 0.00009732 BTC in your account, and currently that equals $0.06, enter ‘0.00009732’ in the BTC field rather than ‘0.06’ in the USD field. Once your account’s balance is at 0, head back to https://www.coinbase.com/settings/security_settings and scroll to the bottom to close your account.

I hope that helps! Should you have any further questions or need anything else, we are here to help.

Thanks [anonymized].

Respectfully,
Danielle | Coinbase Compliance

Wasn't it the case that coinbase made similar closures to accounts that were used in transfers to localbitcoins ? I think i was reading something about it not so long ago.
btw the things that they are asking of you are insane. It almost looks more like an investigation against you, rather than a simple verification.

What's your bitcoin address? You could always check that and see if there were transactions that you don't remember doing, particular a large amount of transactions in a short period of time before the closure.

I answered them as honestly as I could.  Will let you know when they reply.

Good idea, where can I find that?  If it's anywhere in my Coinbase account I cannot access that as it is locked down

I answered everything honestly.  Look at their reply.  This is nuts.

-------------------------------------
NOV 06, 2015 | 03:22PM PST
Danielle replied:
Hi [anonymized],

We regret to inform you that a manual review has determined that you are ineligible to use the Coinbase platform to purchase Bitcoin. We’re sorry for any inconvenience that this may cause.

Please note, that we have not blocked access to any bitcoin balance currently in your Coinbase account; while we can no longer process transactions of this bitcoin via our banking relationship, you may send this bitcoin to a local wallet or another bitcoin address.

Again I apologize for any inconvenience this has caused you.

Respectfully,
Danielle | Coinbase Compliance

How satisfied were you with the quality of service we provided today?
 Poor |  Fair |  Good |  Great
NOV 05, 2015 | 12:40PM PST
[anonymized] replied:
Hi Danielle,   

I never got emails from y'all on 2/16 or 2/23   *I barely use my Coinbase account so any purported "high volume transactions" were not by me.  Additionally, in Sept/Oct 2014 I had a heckuva time placing a couple orders -- they kept getting canceled, I believe b/c of fraudulent activity and bogus accounts. See far below to see my email communication with your Coinbase colleagues. Looks like my Coinbase account, for whatever reason, is plagued with some sort of fraud.

Now let me take a stab at your questions:   
*I don't own any others, just the one associated with this email address i.e. [anonymized]   
*Buy bitcoin when low, save them in cold storage till down the line in the future after probably USD collapse. I have yet to sell any back through Coinbase but I might want to do so at some point   
*I don't remember every single transaction but some were probably from my brother (who also trades bitcoin here and there),
maybe some from my dad   
*My own personal bank account, the one linked to Coinbase   
*Services? I don't think I've ever "spent" a bitcoin on anything. I transfer some to cold storage, some to BTC-e to do some
cryptocurrency day trading, but I really don't "spend" bitcoins on anything

Please advise asap, thanks
- [anonymized]

It seems Coinbase thinks it cannot earn money from you due to your low deposit value of bitcoin and your inactivity.

Coinbase is there to make profit. If it cannot make much profit from you as a customer, it will not treat you as its valued customer and close your account.

That is why we need bitcoin and act as our own bank.

Have you ever transferred BTC from your coinbase account to a LBC account? (this includes either a direct transfer, or a tx from coinbase to your wallet and then using an address spendlinked to the address you send the BTC from coinbase to LBC?

I know that coinbase does not like it when their customers buy BTC from them and then sells that BTC on LBC because it opens them up to a number of regulatory issues, especially if you transfer large amounts to LBC. The fact that you transferred some BTC to btc-e from coinbase may have played a roll in this, however this is speculation.

When you would buy BTC on coinbase and then transfer it to cold storage, when you decide to sell those BTC, would you use the same inputs that are from coinbase, or are the inputs that you use to deposit BTC back to coinbase from other sources?

i dont think you have to worry about coinbase turning into Mtgox, mtgox didnt give its users a headsup to withdraw.

No I have not.

Maybe minimal additional inputs that I got from my dad or bro, but even those they initially got through Coinbase.

Well if they don't want my [legitimate] business then I'll go elsewhere.  Any other reputable American bitcoin brokers out there that y'all would recommend?

Many exchanges offering this service you can check from these https://campbx.com/main.php https://www.bitfinex.com/ and https://www.bitstamp.net/

If you received BTC from your dad or brother who also purchased BTC from coinbase then they may think that you are in control of their accounts and this may be behind the question of asking about other coinbase accounts that you have. If this was their thought process, then they might be afraid that you were using multiple accounts to get around their daily limits, which could potentially expose them to additional credit risk.......this is of course speculation.

Yeah that makes sense but honestly we are not talking about thousands of coins or anything like that, we are talking low small fry numbers.  If they truly yanked by account for 10 or 20 coin transactions here and there I would be very surprised.  Looks like their policy over there is guilty unless proven innocent, or rather guilty guilty guilty despite evidence proving innocence.  I'm gonna use Bitstamp from now on

I was/am obviously speculating, however if you were to have only one small tx linked to your dad's and brother's account and each of those accounts has a daily limit of buying $10,000 per day then they would be exposed to $30,000 worth of exposure per day if you were to attempt to do something malicious with all three accounts.

I am not trying to defend their actions, but rather try to determine some kind of explanation as to why they might have closed your account.

You are totally right.  But I would think if that's what they thought they would at least explain that to me, not just say "sorry but you're out!"