Coinbase freezing funds because there's no official documents of betting.

[Jubilee58]

I know Coinbase is one cryptocurrency exchange with good reputation, and they have measures of identifying fraud, and as well as protecting users fund. If this amount of money was deposited in Coinbase from a gambling platform as the account owner said, I think Coinbase will always see the platform where the money is coming from. Now if the evidence or source of that money has been shown, and they still refuse to release such money, I think there is every reason for further prove by taking a legal action, $900000 is a good sum of money, but if there is no further prove, it shows that something is fishy, and the persons who says the money is his own may not push further to avoid more implication. Many fraudulent activities are really going on, and when someone cannot provide evidence without every reasonable doubt, that means such fund can be a stolen fund.

[TastyChillySauce00]

What a dumb guy. Donating almost 1 million of money to the coinbase just because he didn't read coinbase prohibited use and policy.

What type of activity is prohibited?

You may not use your Coinbase Account to engage in the following categories of activity:

Unlawful Gambling: Lotteries; bidding fee auctions; sports forecasting or odds making; fantasy sports leagues with cash prizes; internet gaming; contests; sweepstakes; or games of chance that are not sanctioned by a governmental body or regulatory authority.

https://www.coinbase.com/legal/prohibited_use

I don't think that guy will get his money back. Even if he's fulfilling all of data requested from Coinbase, and it seems his money potentially being considered as a money laundry.

He is typical representative of most users who post casino scam accusation here. Cheating with casino rules additional not reading them, then going online to announce how unfair casino (or coinbase) is and how he got scammed. I think there is a high chance that he has used also fake ID to verify in Coinbase. Now the cherry on the cake - this so reckless to hold such a huge amount of money in CEX and hope to use those funds or withdraw them to bank account. 

Yep, it's just a usual thing to see someone who didn't bother to read the TOS before he's using it. The sentence "Most of the money came from offshore sportsbook winnings" already explained a lot about his money restricted due to the suspicious source.
I'm not even sure even hiring a good lawyer will help him to get his money back. It's because his case is so serious, and he can't even provide the documentation of his money.

I think the guy who lose his money due suspicious source by CB must go to Wendy's or Mcd to apply a new job.

[Dogedegen]

This will not help them. We have established here that it is very likely the user broke the terms and conditions and possibly even used a fake ID, they have committed several crimes to get this money. The money is fraudulent and Coinbase will not accept it. It would surprise me if they unfreeze it to send it back to him and close his account. The situation is high profile because of the many crimes that are committed and high possibility of money laundering, so it is possible that he will not get any of this money back.

Maybe.. but the victim never mentioned anything related to that. Coinbase is kinda too sensitive to any asset coming from gambling or any assets coming from a big funded source [either it yours or not].

They are not the only one though, I know a couple of exchange that does that aswell..won’t mention their name but definitely not Bybit or Binance and I don’t really trust any of them either.

The point is that, they ask some more and more documents and verifications even the one they know that they or their source will never provide at some point..

Hence, I can’t really say who is at fault here without more detailed and honest information, yet at the end they probably will just tag it along to  their TOS even if he’s clean. But that doesn’t change the fact that the gambler could have also broken some jurisdiction rules by gambling in on an offshore casino as I’ve mentioned earlier.

Well we have established that the money comes from gambling, we don't even have to look into the details to confirm the case such as if a fake ID was used or if the winnings are even real. Coinbase does not allow money from gambling and because of that he has broken the terms and conditions, there is nothing to speculate or discuss here. It is a clear case, like if you brought a weapon without a permit or into a zone that has explicit ban of any kind of weapons. It is a clear and cut case as they say.

When it comes to sensitive, that is a subjective or emotional evaluation of the situation. Coinbase is a heavily regulated business. If they broke AML rules they could be fined tens or even hundreds of millions of dollars. There is no business logic to risk so much money over a small client like this, because transactions like this are often cash out transactions which means Coinbase earns very little from them. They are strict against gambling for a reason, it has a very high chance of being fake winnings that are being used for money laundering. It makes business sense to be cautious..

[qwertyup23]

Let me start by approaching this in good faith and assume that user is not lying. Then only thing that would work their favor is to keep as detailed data of their betting history as possible.

This user claimed to have won $900000 from offshore sportsbook.

However checking his past post history revealed the actual truth.

This guy had been betting from USA using VPN and fake ID!

Consequently no casino would provide him with official betting history and documentation. lol

Ahh then this narrative makes more sense on why coinbase refuses to release and accept his withdrawal.

I experienced a similar situation here in our local wallet wherein coins.ph refuses to allow the withdrawal of my funds given that I received them from an unknown casino. I explained it to them in detail + the  necessary spreadsheet that the funds that I got came from a signature campaign from this forum. Even if they argued that they do not recognize any form of gambling, I explained that the source of my wealth, albeit came from a gambling website, was because of my services in the forum.

Ultimately, they granted my withdrawals and I never was questioned ever again on this matter.

With this guy's case, however, playing in a gambling platform which strictly prohibits the use of VPNs and submission of Fake IDs are grounds to confiscate all of your funds and prohibit any kind of withdrawal. The casino, regardless if regulated or unregulated, has the power to exercise such prerogative in connection with their stipulated rules and regulations.

[Joy- maker]

But in this case, i genuinely believe this is about money laundering. Because why wouldn't the user contact to police or a lawyer if the money is legally theirs?

Hmm, I also think this is money laundering. coinbase is not making any judgmental decision on its own.

According to US and FinCEN regulation, regulated exchange is bound to freeze those fund if they cannot submit any Source of Fund.
So, nothing to solve with Coinbase here. They won't release this money until his proper paperwork of $900k is submitted, as releasing would put the exchange's own license at risk.
Going to a lawyer or filing any formal complaint with CFPB or FinCEN risks getting himself into legal trouble. That is why he is trying to create public pressure on Reddy without going through legal route.

It is okay to suspect that this is a case of money laundering,  but let's not jump to conclusion without having all fact.  And for the fact that the person in question has not contacted the police or a lawyer doesn't automatically mean the funds are illegal. I'm not trying to play defense here,  but there could be other reasons behind coinbase action.  So,  let's allow the proper authorities to investigate the matter before making any definitive conclusions.

[PERtua]

I know Coinbase is one cryptocurrency exchange with good reputation, and they have measures of identifying fraud, and as well as protecting users fund. If this amount of money was deposited in Coinbase from a gambling platform as the account owner said, I think Coinbase will always see the platform where the money is coming from. Now if the evidence or source of that money has been shown, and they still refuse to release such money, I think there is every reason for further prove by taking a legal action, $900000 is a good sum of money, but if there is no further prove, it shows that something is fishy, and the persons who says the money is his own may not push further to avoid more implication. Many fraudulent activities are really going on, and when someone cannot provide evidence without every reasonable doubt, that means such fund can be a stolen fund.

Proving ownership of cryptos does not mean proving their source. While blockchain records can reveal funds origins. Not necessarily their sources of income. Coinbase might ask for further documents to confirm their authenticity. But the absence of betting documents does not constitute evidence of stolen money. History of transactions at the gambling site and the history of withdrawals could shed light on the situation. Finally a decision should be made on the basis of evidence and not assumptions.

[Localhostspeed]

Since Coinbase is already suspicious of how the guy got the $900,000 and asked him to show source of the money, and as the guy showed Coinbase the proof of his deposit, bets, and withdrawals, and yet it was not enough to convince Coinbase that the money is not money laundry, and since the casino where the guy won the $900,000 cannot give him official documents showing years of his bet history which could serve as source of the money and evidence for Coinbase to open his closed account, if the guy knows the money is a clean money he should sue Coinbase.

I can't believe stake are going to sleep on their customers unless they are pained that he won $900k and they will rather watch him lose the money than help him defend that he won the money legitimately. That kind of proof shouldn't be hard to help in this situation, they will be putting customers in more trust as a company because they know they can stand for them at a difficult times, but if they decide to keep mute with the situation on ground, it says alot about them and their company.

Alternatively, I will also suggest the person go to court too, nobody is bigger than judiciary. He should sue them and go there with his accounts, there are evidence bet history, how much wagered and how much made for some months to a year depending on the casino. That should be enough to unfreeze the accounts to withdraw his money and I hope he stop using the exchange, I personally don't like Coinbase but since they are not available in my country, I don't play there.

[adultcrypto]

Let me start by approaching this in good faith and assume that user is not lying. Then only thing that would work their favor is to keep as detailed data of their betting history as possible.

This user claimed to have won $900000 from offshore sportsbook.

However checking his past post history revealed the actual truth.

This guy had been betting from USA using VPN and fake ID!

Consequently no casino would provide him with official betting history and documentation. lol

Keeping $900k in an exchange irrespective of where the money come from already raises a red flag and open the door for proper investigation. Coinbase might have known that the money is not clean which was why they asked for further documents.

I don't want to start to apportion blames but this is a good lesson for us to always remember that "not your keys, not your coins". Assuming the money was sent to private wallet, even though it came from offshore casino as alleged. The second lesson from this is that casino records may not suffice as proof of funds, although the user can request for official documents from the casino which they are obligated to provide.

[Ziskinberg]

I can't believe stake are going to sleep on their customers unless they are pained that he won $900k and they will rather watch him lose the money than help him defend that he won the money legitimately. That kind of proof shouldn't be hard to help in this situation, they will be putting customers in more trust as a company because they know they can stand for them at a difficult times, but if they decide to keep mute with the situation on ground, it says alot about them and their company.

A proof can be acquired from the users end, and you don't even need to ask a certain casino to provide that.
What I believe a user needs to present to coinbase for clients are these;

1-statement of account for ( wins-losses) net loss/profit
2- statement of withdrawals/deposits (crypto transactions movement)

I think these are just the basic, and he can already justified it, if coinbase will evaluate they can directly coordinate with a certain casino to verify.

now, I only see one problem, if the winner did pay taxes on the winning, because if not, it could be a problem/

[mak013]

I don't get why this is called money laundering. At the same time, he's breaking the ToS and U.S. law (if I understand correctly, he'd have to prove where the money came from if asked). So he has two problems here: one with the casino (which seems solved if he withdraws the money) and one with the exchange.
And here's the most interesting part: does the exchange really need his bet history, or does it just want to steal his money?

The exchange saw where the coins came from, so they obviously saw an US citizen getting money (and not little0 from a service that is not allowed in the US.
Also, no, fully regulated exchanges don't just grab your money and take it away, the whole thing will not happen without a court order, they have frozen his coins, if he can prove he owns them and they are not illegal funds, he will have them back, otherwise, they would go to the government, coinbase is not taking a share of that, it would be illegal and the SEC would be all over them.

Another thing: if the money is not stolen but earned in a way that was not legal in the US, it doesn't make them illegal; it's still his money, and he will face a different fine for that but he might get away avoiding 18 USC §1955 since he's not an organizer of illegal activity, he played illegally, so he might face charges but he might get his money (minus tax, lol, cause the IRS sees that as taxable income).

I don't know enough about US law. If he got the money from an illegal service, why is he allowed to get it? Even if he proves it's his money (if he used a fake ID, does he have to prove that he used it?), he got it from an illegal service. I thought it would be transferred to the state treasury (or something like that). Taxes are ok - there's no doubt he received income. I'm surprised he can get it from a prohibited service.

[stompix]

I don't know enough about US law. If he got the money from an illegal service, why is he allowed to get it?

Is stake illegal? No! Did Stake consider his winnings legal, yes as he got paid!
There is no difference here between this guy and a guy from the US going to Mexico and betting from there on Stake.
As I asked before, do you know a country that bans the usage of a fictitious ID on a service that is outside that country's jurisdiction?

I'm surprised he can get it from a prohibited service.

You got the prohibited part wrong!
Stake should not have allowed a US citizen to gamble. Stake paid legit earnings, the "crime" he has committed is simply gambling if that was illegal in his state, this doesn't void property.

[Bitcoin Maxi]

Proving ownership of cryptos does not mean proving their source. While blockchain records can reveal funds origins. Not necessarily their sources of income. Coinbase might ask for further documents to confirm their authenticity. But the absence of betting documents does not constitute evidence of stolen money. History of transactions at the gambling site and the history of withdrawals could shed light on the situation. Finally a decision should be made on the basis of evidence and not assumptions.

What is the need for providing source of income after explaining that fund was coming from gambling? This is ridiculous and if this exchanges were given the power to do all this, they will become too serious to freeze users funds for unethical reasons.
Coinbase has been having issues with their users and this is not today they are banning and freezing their users funds. This is why the exchange is not growing at all due to their unscrupulous freezing and claiming people's funds.

[Josefjix]

Proving ownership of cryptos does not mean proving their source. While blockchain records can reveal funds origins. Not necessarily their sources of income. Coinbase might ask for further documents to confirm their authenticity. But the absence of betting documents does not constitute evidence of stolen money. History of transactions at the gambling site and the history of withdrawals could shed light on the situation. Finally a decision should be made on the basis of evidence and not assumptions.

What is the need for providing source of income after explaining that fund was coming from gambling? This is ridiculous and if this exchanges were given the power to do all this, they will become too serious to freeze users funds for unethical reasons.
Coinbase has been having issues with their users and this is not today they are banning and freezing their users funds. This is why the exchange is not growing at all due to their unscrupulous freezing and claiming people's funds.

No, you can't say that, looking closely, you'll notice that the user can't provide the documents showing betting history and it's ethical for coinbase to ask for proof of source of funds because the amount is too large to be won off betting platform. Moreso, coinbase has an algorithm that can automatically detect deposits from sketchy sources especially fake crowdfunding ICOs, gambling platforms that doesn't coincide with coinbase policy and stuffs.

Only a legitimate proof of source can let that user be able to get access to the funds.

[lovesmayfamilis]

Edit: Since people don't read the comments, i am pointing out in here that. Iranus already provided the update, confirming that this was money laundering attempt.

How interesting, OP. You highlighted everything in red, and the editing of the post took place five days ago, you could say, on the same day that you created the topic, but, however...

https://bitcointalk.org/index.php?topic=5595906.msg67208325#msg67208325

You are right to note that many people do not read the discussion; moreover, they do not even read the topic itself, and warnings and explanations can no longer affect either the color or the size of the letters. Just check how many responses you received after you clarified the reason for the freezing of the funds of the person who provided the false documents. Indeed, @nutildah will not run out of work for a very long time.

[Ishicryptic]

Proving ownership of cryptos does not mean proving their source. While blockchain records can reveal funds origins. Not necessarily their sources of income. Coinbase might ask for further documents to confirm their authenticity. But the absence of betting documents does not constitute evidence of stolen money. History of transactions at the gambling site and the history of withdrawals could shed light on the situation. Finally a decision should be made on the basis of evidence and not assumptions.

What is the need for providing source of income after explaining that fund was coming from gambling? This is ridiculous and if this exchanges were given the power to do all this, they will become too serious to freeze users funds for unethical reasons.
Coinbase has been having issues with their users and this is not today they are banning and freezing their users funds. This is why the exchange is not growing at all due to their unscrupulous freezing and claiming people's funds.

A good thing that you noted your reservations about Coinbase, how they can ban and freeze users accounts on their platform, I guess that they're being too careful about criminals using their exchange for money laundering, it is left for people who needs exchange accounts to do their research before registering in a CEX. But I still think that if somebody don't have anything to hide and they are prepared to provide any personal requirements to Coinbase they shouldn't have anything to worry about having an account in their exchange.

I don't think that Coinbase, can ask their customer to provide information that is not obtainable, if they do that it would mean that they are not reputable. I hope gamblers that sends their wins to Coinbase exchange should be using reputable casinos to gamble so they can conveniently retrieve any information that Coinbase might require if they suspect their account.

[ZeroVinsonN]

It's not realistic for someone who was legit to leave that amount of money without trying to fight for it, everything currently points to it being a case of money laundering and this is why when people say KYC and 1x wagering should be stopped for casino I tend to not agree, especially the KYC verification so that people don't end up using these casinos to launder money.
He is lucky he used a fake ID with a VPN but hopefully the authorities will catch up to him and his group because there is no way this is a one man thing.

[DPHOR]

If is not about money laundry then it's advisable for him to provide the source of funds. Again, for people like us who does not gambling gambling record or history is that possible for gambling site to delete someone deposit history or gambling history on their site after Many months?
I am just curious to know, because I do not know if someone can start to keep requesting for these details so that if such scenarios happens to come out then someone can easily present it to exchange.
Then again, I asked how come he managed to accumulate all these funds on the exchange without the user thinking of removing some of it from exchange because the larger the money on exchange the difficult it could be to have them withdrawn from the exchange and even if is very little they could start monitoring the account activity.

[IjawMan]

But in this case, i genuinely believe this is about money laundering. Because why wouldn't the user contact to police or a lawyer if the money is legally theirs?

If it's money laundering, he will not post this online to ask for advice; there was advice on Reddit coming from someone with similar issues, but he did not ask for a lawyer's help because of the 25% cut and was advised to hire a lawyer on an hourly basis.

He may still post or may not whether it was money laundering or not. But this does not look as a money laundering except we want to say that people do not win big money in bets anymore.

On the call for a lawyer, It could be the guy is want to exhaust other available channels he can use and if it did not yield positive results he can then get an attorney as his last option.

can't imagine someone with this huge amount and yet ignore the terms of the exchange.

People will not know it ontil it happened that the cost of ignorance and laziness for due diligence ignored is on their money.

[Franklyn-wood]

I know Coinbase is one cryptocurrency exchange with good reputation, and they have measures of identifying fraud, and as well as protecting users fund. If this amount of money was deposited in Coinbase from a gambling platform as the account owner said, I think Coinbase will always see the platform where the money is coming from. Now if the evidence or source of that money has been shown, and they still refuse to release such money, I think there is every reason for further prove by taking a legal action, $900000 is a good sum of money, but if there is no further prove, it shows that something is fishy, and the persons who says the money is his own may not push further to avoid more implication. Many fraudulent activities are really going on, and when someone cannot provide evidence without every reasonable doubt, that means such fund can be a stolen fund.

Is this money real or fantasy, how on earth will someone send such amount of money into a bet account. What was he thinking. Maybe he has been doing it with other betting sites and wants to try it again here on Coinbase without reading or understanding the TOS because he needs it quickly. What bank allows such withdrawal into a bet account, the amount is huge. Well I have been hearing how some dubious scammer sends money from there victims accounts into bet account to avoid tracing them easily, especially when the have access to the person's account. Some will buy gift cards, data, and other items online another limit access to them.

[KTChampions]

Edit: Since people don't read the comments, i am pointing out in here that. Iranus already provided the update, confirming that this was money laundering attempt.

How interesting, OP. You highlighted everything in red, and the editing of the post took place five days ago, you could say, on the same day that you created the topic, but, however...

https://bitcointalk.org/index.php?topic=5595906.msg67208325#msg67208325

You are right to note that many people do not read the discussion; moreover, they do not even read the topic itself, and warnings and explanations can no longer affect either the color or the size of the letters. Just check how many responses you received after you clarified the reason for the freezing of the funds of the person who provided the false documents. Indeed, @nutildah will not run out of work for a very long time.

The irony is that you didn't read the topic yourself, yet you accuse others of doing the same 
What’s being said about money laundering is complete nonsense, he simply gained access to a service that restricts access for US citizens. Since the service itself has no complaints, what exactly is the problem? I don't even know if providing a fake ID can be considered an offense, since it was "virtually" not on US territory and not with a US service. In any case, the money belongs to him, there was no money laundering involved.