Coinbase patents platform to fight illegal bitcoin activity

[hugeblack]

It seems that we are going to witness a new era of regulation. Instead of sending your identity (KYC,) you should get an assessment of your "own compliance score" to avoid automatic bans.
In addition, if a "suspicious account" exceeds a certain limit, all information will be sent to legal agencies.
The system will be self-learning to maintain an environment with "good" accounts.

Each account then gets its own compliance score, which is determined by many factors. For example, one of the sections contains such user data as age, location, account balance, transaction volume, verification history and the number of devices used to access the platform.

The system also takes into consideration the overall history and the number of legal compliance checkups for the corresponding account to determine whether it’s “good” or “bad.” All the accounts deemed belonging to the latter group will be automatically blocked.

Read more ---> https://decrypt.co/12622/coinbase-patents-platform-to-fight-illegal-bitcoin-activity

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[Slow death]

Sometimes it seems that the owners of the exchanges forget that they are dealing with bitcoin. let's look at this:

Furthermore, if a “suspicious” account makes a transaction worth more than $2,000, all the corresponding information will be transmitted to law enforcement agencies.

1 BTC = $7700

there are people who own a lot of bitcoins, are investors who bought when the price was low or are miners... the fact is that 1 bitcoin has a price much higher than $2000. I wonder why $2000 instead of setting values too high? As far as I know criminals do not waste time committing crimes to earn $2000, they always target big money

[Patatas]

I can’t even explain how infuriating it is to read this. Coinbase has be one of the worst thing that has ever happened to bitcoin. More awareness needs to be spread to avoid exchanges like Coinbase which actually track and control your transactions. I think only the traders, noobs and general crowd used coinbase. Sophisticated long time bitcoin holders still believe in P2P and dark web paves the way to avoid the KYC crap.

[o_e_l_e_o]

Dear lord. If ever there was a reason not to use Coinbase, this is it. Even after they hand over your details to the government, even after they partner with and employ companies which develop and sell surveillance and spying software, even after they willingly sell your personal details to third parties without your consent, they still manage to surprise me with their shady behavior. An automated algorithm, the details of which you won't be able to see, will give your account a "score". Get the wrong score, and your account is immediately blocked (and given how shady Coinbase is and how terrible their support is, good luck getting back any coins on your account if it is blocked), or even worse, they send all your personal details and account information to the police. You don't actually have to commit a crime, you don't even need your "suspicious activity" reviewed by an actual human. If you trigger the wrong thing (which may be something as simple as logging in from too many different devices) on their secret algorithm, straight to the police you go.

Who in their right mind is still using this exchange?

[alyssa85]

Sometimes it seems that the owners of the exchanges forget that they are dealing with bitcoin. let's look at this:

Furthermore, if a “suspicious” account makes a transaction worth more than $2,000, all the corresponding information will be transmitted to law enforcement agencies.

1 BTC = $7700

there are people who own a lot of bitcoins, are investors who bought when the price was low or are miners... the fact is that 1 bitcoin has a price much higher than $2000. I wonder why $2000 instead of setting values too high? As far as I know criminals do not waste time committing crimes to earn $2000, they always target big money

They haven't forgotten they're dealing with bitcoin - they're just complying with the money laundering rules in their area.

Some jurisdictions (like Spain) have lower limits of just 1000 euros, so $2000 is actually generous.

[Potato Chips]

LOL. Imagine getting your personal information handed to those legal agencies because of a false alarm...... which is probably gonna be the case for the most part. With how strict coinbase is, it wouldn't be wrong to think that criminals have long strayed away from it, although there could still be a FEW.

Inb4 countless complaint threads because of this.

[squatter]

Sometimes it seems that the owners of the exchanges forget that they are dealing with bitcoin. let's look at this:

Furthermore, if a “suspicious” account makes a transaction worth more than $2,000, all the corresponding information will be transmitted to law enforcement agencies.

1 BTC = $7700

there are people who own a lot of bitcoins, are investors who bought when the price was low or are miners... the fact is that 1 bitcoin has a price much higher than $2000. I wonder why $2000 instead of setting values too high?

In the US, financial institutions file Suspicious Activity Reports above a $5,000 threshold. Many other countries have similar conditions required by AML statutes.

Sadly, there is now a renewed push from the powers that be towards lower reporting thresholds. For example, the FATF travel rule -- which isn't actually law yet anywhere -- requires customer due diligence above $1,000.

Plus, compliance-minded exchanges like Coinbase will be erring on the side of caution and may implement lower internal thresholds than the law actually requires.

[buwaytress]

I can’t even explain how infuriating it is to read this. Coinbase has be one of the worst thing that has ever happened to bitcoin. More awareness needs to be spread to avoid exchanges like Coinbase which actually track and control your transactions. I think only the traders, noobs and general crowd used coinbase. Sophisticated long time bitcoin holders still believe in P2P and dark web paves the way to avoid the KYC crap.

Not sure about dark web but yeah p2p has and always will be a great way to trade, IMO, and with all kinds of good non-custodials now allowing that to happen more easily, I always believe p2p will not only get revivals but will be a major way for people to trade and transact bitcoin.

Then, once we get all them privacy tools a bit more UX friendly and easier (coinjoin), coupled with second-layer maybe, occassional dash of mixing, we'll really have plenty of ways to protect our privacy -- without needing to go down dark paths.

[SFR10]

The system will be self-learning to maintain an environment with "good" accounts.

Usually, major issues arise when an automated system is in place but the main issue here, is the fact that Coinbase already had a lot of issues and now they're adding a freaking automated system to make them even bigger pain in the a** ^[SMH]...

More awareness needs to be spread to avoid exchanges like Coinbase which actually track and control your transactions.

Unfortunately, it's a lot harder than that (thanks to Google's search results ^{[mostly page 1 or 2]})...

However, the user will have a chance to dispute the decision and unlock their account in case it was wrongfully blocked by the automated system.

I think everybody knows how long that procedure is going to take ^[SMH].

[Lucius]

Currently, it is unclear whether Coinbase intends to implement its newly patented system or not.

The very fact that they have developed such a thing tells us that they are seriously considering implementing it. But it is likely that they will test the whole thing to see how good or bad the system is, because it makes no sense to label hundreds of thousands of accounts as bad because the system doesn't actually work well.

Personally, I think things like this can do more harm than good, which will probably prove correct if the system becomes operational.