Bitcoin Forum

Thought I should post this here considering the seriousness of this topic and how big coinbase is for USA people.

I bought 10 bitcoins, 4.5, and .4 on Oct 18/19 @ around $150-160.  

6 days later, within almost the hour that the coins were supposed to arrive, I receive the following email for all 3 transactions:


I didn't think it was a big deal after doing a little research since they have squared things away with similar situations, and I've made a 10BTC transaction in the past, but i was a bit worried because of the size of the transactions and the movement of the market.  I ask this how could this be fixed?

6 days later, I finally get a response:


This response really didn't tell me anything.  So I ask what my other options are and here is there next response:


Something really just doesn't add up here.  At the date and time that the bitcoins were supposed to be added to my account, the price was at like ~199 and 200+ on bitstamp and mtgox.  Thats ~$50 increase since the time i bought it, costing me nearly $7-800.  

So what did coinbase do with the ~$2500 that was in limbo for so long?  And what happened to the bitcoins that was purchased at much cheaper prices?

I mean coinbase could have just denied these transactions right away, and I could have went to another site to buy it right away.

The thing that really hurts about this is that none of this money was mine.  I am just a student and I finally convinced family and friends that bitcoin is a worthy investment and they finally trusted me giving me this money to invest.  Is there anyway that this could be reconciled?

It's not too hard to see how it works.  I validate my bank account.  I initiate transaction on my end, they buy bitcoins on their end and wait few days for my money to reach them.  They tell you it has to take a week or longer and gives u specific date.  Since bitcoin is so volatile, big changes can happen in a week.

IF bitcoin goes up, they cancel my transaction and say it is "high risk" and initiate a return of my money.  IF bitcoin goes down they allow transaction to stay and they keep my money and give me the bitcoins.

It is common sense.  Obviously they're not going to steal from every transaction, and they can pick and choose how much they make. 

http://blog.coinbase.com/post/44046687068/high-risk-transactions

This blog post here is vague and a lie.  He cites that it is because ppl try to scam them with fake bank account #s and such.  That is such a lie, because you can never scam someone with fake bank account # if the purchase isn't instant.  because transaction won't go thru, DUH.  Same with fake credit card #s, it WONT GO THRU.

With the whole high risk transaction mechanism, coinbase can literally control exactly how much they can make off of the volatile market.  I was one of the people that got hurt REALLY bad.  some ppl might even benefit from a canceled order.  but the point is, coinbase CONTROLS everything.

I want coinbase to SHOW PROOF that they have been ripped off because people used fake bank account #s.  THEY CAN'T.  Because you can't get ripped off from a fake account #.  You cannot get ripped off if the purchase is not instant.

With the high risk transaction mechanism, Coinbase is GUARANTEED to make money.  In a market that is growing, all they have to do is have the system set to flag xx% of transactions, and they are GUARANTEED to make money off this. A LOT of money based on how many transactions they process.

COINBASE, if you are reading this.  Please respond and defend your case (i know, your answer would probably be "we can't disclose, blah blah blah.)

Not to be flip, but Coinbase is run by a Goldman Sachs forex trader. What did people expect?

Jamie!

Has anyone encountered any issues SELLING to them?  I'm curious if the "high risk" flag goes both ways.  FWIW, I've used Coinbase many times without issue.

Jamie Dimon is JP Morgan.

that explains alot of things !  ::)

https://twitter.com/FEhrsam

Coinbase runs by Goldman Sachs? Man then this is standard!

then the US gov is okay with bitcoin  ;)

I had the same thing happen to me when I joined Coinbase a few months ago, but they eventually processed the transactions at my original purchase price after emailing and posting on here. The price had gone up around $30/BTC during that time. If you search the forums, you'll discover this is pretty common, and they normally right their wrongs.

It's odd they didn't process the transactions at the original purchase price for you or even mention that as an option in their email responses. Their customer service has always been shit, but it is a nice service to use once you're at Level 2 and can buy and sell instantly.    

I use coinbase for selling coins.

Haven't tried purchasing though. Don't like hearing this kind of stuff though.... Is the forex trader connection true?

basically, coinbase is using customers as insurance when they trade.  Also, i do have proof of problems when you sell on coinbase.  i will post it later with screen shots.

Here's the kicker... I already successfully bought 10 btc from them with no problems in the past.

all they would have to do is flag more high risk transactions when it goes in their favor then when it doesn't to make a nice profit.

when they were still in beta? or after?  8)

Coinbase buys instantly about 90% of what you "buy" when you do, and buys the other small bit when the money actually comes in. Thus, if a large price increase occurs they would take an overall loss on the sale due to the rise in price THUS they lie to you and say "flagged for fraudalent transaction" or some other BS to prevent a loss. Really wishing someone would sue them for this obvious and blatant lie and act of fraud against customers.

Yes, I agree. This exact thing happened to me when I tried to buy at $20 a year ago, right before it shot up to $40 and they cancelled my transaction also. Can anyone tell me where a decent exchange might be for the US right now. If I feel like selling my BTC I'd like to be able to do so.

What is appalling are the people who don't understand what is going on, and even defending coinbase because they haven't gotten scammed yet.

If you understand how the process works, then it is as clear as day that the high risk transaction thing is not a "detection system" that they have or whatever other bogus claim.  It is a way for them to have insurance when they trade, at the expense of the customer.

because they make sure they receive the money from the customer 1st and then decide to cancel or approve, depending on bitcoin prices.

after

so maybe they "resetted" your account to sketchy mode? lol   ;D

Do you have any proof?

Its pretty obvious thats what they do. They say in one of their FAQ sessions, about the 90% or whatever. Find me someone who made a purchase with them and got canceled after the price went down. Funny that no one has ever had a purchase get canceled due to "fraud prevention" after the price goes down a significant amount.

~call the California money transmitter licensing agency imo

I used them multiple times in the early part of the year when the price of Bitcoin was skyrocketing.  At that time there was no instant credit so I had to wait out the multiple business day hold but never were the transactions flagged for fraud.  I'm not saying one way or the other what's going on because I truly don't know, just telling you my experience. 

Maybe it has something to do with the credit check company they use or certain people's credit history? 

OP if you feel so strongly that you are right and you are in USA go sue them.  You fully ID yourself already and they got us fiat bank accounts so collecting if you win will be easy.  Small claims judges generally see through the bullshit rather well and it's cheap to sue in small claims.

They just got me for over $1000

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

I encourage people to file complaint with Better Business Bureau in CA. These guys are lieing through their teeth to customers. Their TOS allows them to consider EVERY transaction high risk so they can select a few random to cancel.

Their TOS also contradicts the post by their CEO addressing cancelled orders in the CoinBase blog.

They lead users to believe you are purchasing BTC directly when in fact you give them money, and they obtain the BTC from an exchange. This is also evident when BitStamp goes down tickers/buy/sell all atop working.

Coinbase themselves MUST know the high volatility of BTC, so they MUST know they have to determine whether a transaction is fraudulent early on. Yet it takes them an entire week to cancel from their "automated" software and after BTC skyrockets.

If they indeed thought a transaction is fraudulent or cannot fullfill it, there is absolutely NO reason to wait an entire week.

These guys are using customer money as fractional loans during the 1 week period for themselves to either resell for massive profit when BTC goes up, or let the transaction go through and sell to the customer at a massive gain when BTC goes down.

Their lack of willingness to work out transactions with customers and continued lack of action on rectifying the 1 week hold points to this as well.

New people need to be warned that CoinBase is a whole lot of snake-oil. I got suckered in by their sleek design and promise of ease in converting BTC/FIAT. I thought their TOS statement was a CYA, but they are actively using it to screw random customers. You feel safe when you see the "You WILL receive your BTC by...". When in fact you just bent yourself over for them.

that's hilarious.  Don't you know the BBB is the biggest scam of all?  You can 'buy' a good standing membership no matter how awful your history.  BBB is a raging lie.

Did you know university accreditation costs money? Mostly because the people that do the audits need to be paid? *Gasp* such a scam.

~in BTC?lol  8)