Coinbase defrauding customers, misleading !

[Trance]

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 ^^

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[russokai]

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.

[beetcoin]

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

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

[japerry]

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 ^^

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.

[Trance]

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.

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

[coinpr0n]

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.

[Olaf (Coinbase)]

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!

[moderate]

Trance,

Sorry for the confusion here. We use machine learning algorithms to prevent fraud and they're not always 100% accurate.

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.

[KGBSlim]

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.

[almostmike]

Wondering how many of you saying this have new accounts because I see that is the case most time.

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.

[KGBSlim]

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

[moderate]

if you guys need any help via marketing and PR shoot me a pm!

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

[Trance]

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!

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.

[Trance]

"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

[csun]

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.

[moderate]

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

[bakada]

..

[Trance]

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!

[coinpr0n]

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.

We've had similar experience.   1 of 3 transactions made it through.  The other 2 were cancelled when the price of BTC moved against them when the fulfilment date came around.  Funny that.  No point in doing business with them.

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

[Trance]

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.

We've had similar experience.   1 of 3 transactions made it through.  The other 2 were cancelled when the price of BTC moved against them when the fulfilment date came around.  Funny that.  No point in doing business with them.

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