Concerned about accounts at Coinbase...

[Phinnaeus Gage]

http://www.americanbanker.com/bankthink/swapping-bitcoin-privacy-for-banking-convenience-1056990-1.html

http://www.reddit.com/r/Bitcoin/comments/18g02v/new_message_from_coinbase_today_sorry_the_maximum/

Your "ignore" button is getting pretty brown there bud. :/

That's odd! I see yellow. But I guess yellow and brown make baby poop.  

[thefiniteidea]

Okay well at least they had sent an email out. I hadn't checked my inbox until today.

On Feb 15, 2013 you purchased 10.00 BTC via bank transfer for $272.24.

Unfortunately, we have decided to cancel this order because it appears to be high risk. We do not send out any bitcoins on high risk transactions, and your bank account will not be charged.

Please understand that we do this to keep the community safe and avoid fraudulent transactions. Apologies if you are one of the good users who gets caught up in this preventitive measure - we don't get it right 100% of the time, but we need to be cautious when it comes to preventing fraud.

You may have more luck trying again in a few weeks. Best of luck and thank you for trying Coinbase.

Kind regards,
The Coinbase Team

That resolves that issue. Everyone can sleep soundly tonight.

Thank you all for your time. 

[Walter Rothbard]

I would like some more guidance from Coinbase on how to not be flagged as a "high risk" transaction.  I wonder if it would help to buy less BTC at a time, for example.  (In our two transactions that happened on the same day, I bought 1.0, you bought 10.0, I eventually got mine.)  Does it have anything to do with how long you've been a customer, I wonder?  It'd be helpful to know, if they can reveal anything.

[thefiniteidea]

I agree that it would be nice to know how not to get flagged.

I also don't understand why they have an advertised limit if they're just going to do their own enforcement of a different, unknown limit.

Basically might as well be, "Try and get whatever you want, if you can even put the order through (we may have reached our limit for the day, braah)... maybe we'll accept it, maybe we wont. Whatever, you'll try anyway. We've done business with you before, we know you'll come back. You love us. We kind of trust you too, but this time it may be different maaan... we don't like that crew you've been hangin' around with lately, bad vibes bro. Also, if it's an order that gets placed right before Bitcoins go up in value by like 10%, fuck it we're gonna cancel it. That shit is ours to sell at a higher price dude. You understand how money works. Thanks for using our service anyway. Peace and love. Gotta get back to saving the world..."

 

[thefiniteidea]

This literally just popped into my head as possible:

-----------

Exchange Rate is 10 USD = 1 BTC

-----------

Reserves =

100USD
100BTC

Total Worth In USD = $1,100

-----------

User 1 Buys 10 BTC with 100 USD

User 2 Sells 10 BTC for 100 USD

Not to each other, and not at that time.

-----------

1 Week Later

-----------

Exchange Rate is 12 USD = 1 BTC

-----------

User 1 gets order cancelled due to "high risk"

User 2 has order go through due to "having great hair"

-----------

Reserves =

0 USD
110 BTC

Total Worth In USD = $1,320

-----------

Process is repeated thousands of times, as well as inversely cancelling sell orders when price goes down. Needs more USD or BTC reserves? Uses MtGox and gets market rate.

... all this plus a 1% fee.

Hmmm... something is very fishy around here.... I think I should start my own Coinbase . Any willing investors?

[Walter Rothbard]

I agree that it would be nice to know how not to get flagged.

I also don't understand why they have an advertised limit if they're just going to do their own enforcement of a different, unknown limit

I don't think it's necessarily an unknown limit.  The founder of coinbase has previous experience in fraud detection.  They are using some sort of algorithm/heuristic to flag transactions as "risky."  Their rules are extra conservative on purpose, especially this early in the game, which means there are going to be a lot of false positives.  That may translate to a lot of offended users and a lot of bad will, or they may be right on with the amount of false positives that can go through at this point without shooting themselves in the foot for growth.

I also suspect they won't be forthcoming with details about what flags a transaction, because they don't want to facilitate anyone being able to game their system and make it easier to defraud them.  Unfortunately that leaves us in the dark as to what we can do to not be flagged as risky, and unfortunately it also leaves a scary space in there where they could be canceling transactions solely to avoid taking big losses when the spot price of bitcoin swings wild.

Long term a more stable price in bitcoin should help them with their business model.

In the meantime I am going to keep using them, but I am also continuously investigating other means of acquiring and accumulating 'coin, and I think we should all keep doing that.

[Walter Rothbard]

Hmmm... something is very fishy around here.... I think I should start my own Coinbase . Any willing investors?

heh, as cool as that sounds, I wonder if anyone could do better.

(Go ahead, I'm just daring someone to do better!)

[Walter Rothbard]

Interesting:

Before a coinbase purchase is final, you can cancel it if you change your mind:

http://blog.coinbase.com/post/35793110695/quick-update-on-bank-integration

Wow.  I've got to say that's awfully decent of them!

[thefiniteidea]

Interesting:

Before a coinbase purchase is final, you can cancel it if you change your mind:

http://blog.coinbase.com/post/35793110695/quick-update-on-bank-integration

Wow.  I've got to say that's awfully decent of them!

That makes no sense. I could just cancel every buy order when the market goes down and keep orders when the market goes up.

I wonder how well this feature actually works, if at all.

If it does work efficiently, I'm going to be a millionaire.

[Walter Rothbard]

I am looking all over for what I read from Brian Armstrong about his previous experience with payments fraud detection at a previous Y-combinator startup, and am not finding it.  It was valuable for understanding exactly what Coinbase is doing and why they are flagging transactions as "risky."

[thefiniteidea]

http://support.coinbase.com/customer/portal/questions/775999-what-is-high-risk-

http://support.coinbase.com/customer/portal/articles/896814-how-can-i-cancel-my-bitcoin-purchase-

A button labeled 'Cancel' will appear on the right of the transfer if it can still be canceled.

If the cancellation window has passed, you will need to wait for the bitcoin purchase to complete, at which time you can immediately sell the bitcoin.

So there is a time limit for you to cancel, which I would imagine is not very long.

[thefiniteidea]

I am looking all over for what I read from Brian Armstrong about his previous experience with payments fraud detection at a previous Y-combinator startup, and am not finding it.  It was valuable for understanding exactly what Coinbase is doing and why they are flagging transactions as "risky."

But, as I stated before... if you cancel enough of the "right" transactions... you could make a fortune.

Possibly a great market making scheme.

I may be on to something, but I need more evidence...

[Phinnaeus Gage]

I am looking all over for what I read from Brian Armstrong about his previous experience with payments fraud detection at a previous Y-combinator startup, and am not finding it.  It was valuable for understanding exactly what Coinbase is doing and why they are flagging transactions as "risky."

But, as I stated before... if you cancel enough of the "right" transactions... you could make a fortune.

Possibly a great market making scheme.

I may be on to something, but I need more evidence...

Wouldn't somebody implementing said practice trigger an algo-heur?

[Severian]

Any willing investors?

Coinbase's customers are the investors and Coinbase doesn't even have to pay them to use their money for market operations. They just cancel the order and return it after 3, 5, 7 days.

If Pirate had operated like this, he'd still be in business.

[thefiniteidea]

Any willing investors?

Coinbase's customers are the investors and Coinbase doesn't even have to pay them to use their money for market operations. They just cancel the order and return it after 3, 5, 7 days.

If Pirate had operated like this, he'd still be in business.

I just need a bit of seed capital to get things rolling :-P

[Severian]

I just need a bit of seed capital to get things rolling

It looks like Silicon Valley is ripe for your idea. : )

[Walter Rothbard]

Apparently a lot of people have been asking about this.  Coinbase updated their blog today with a response to someone asking about the same thing:

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