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

[free-bit.co.in]

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.

I agree with this point. It is crucial to keep track of your own spreadsheet, proof of deposit and withdrawal and on chain transaction hash.

However there is another cardinal rule to remember alongside this.
Never transfer funds directly between a CEX and gambling site.
You should always use your own personal on chain wallet as an intermediary between exchange and casino.

I use MetaMask and Electrum for this purpose, so that exchange wallet doesn't get flagged for gambling related activity.

[sompitonov]

I agree with this point. It is crucial to keep track of your own spreadsheet, proof of deposit and withdrawal and on chain transaction hash.

However there is another cardinal rule to remember alongside this.
Never transfer funds directly between a CEX and gambling site.
You should always use your own personal on chain wallet as an intermediary between exchange and casino.

I use MetaMask and Electrum for this purpose, so that exchange wallet doesn't get flagged for gambling related activity.

Yes, the days when it didn't really matter if you transferred funds or cryptocurrency directly from a centralized exchange to gambling sites are over; times have changed, and it is now essential to practice good digital hygiene. You need to monitor and perhaps even keep strict records of all incoming and outgoing transactions, because we never know how much stricter regulatory requirements and anti-money laundering rules in the crypto space might become though, in my view, they are bound to tighten. I’ve also heard that more than half of the money in gambling is "dirty" money, though I certainly don't know for sure if that's true...

[o48o]

-cut-
Never transfer funds directly between a CEX and gambling site.
You should always use your own personal on chain wallet as an intermediary between exchange and casino.

I use MetaMask and Electrum for this purpose, so that exchange wallet doesn't get flagged for gambling related activity.

Even if this wasn't money laundering (which it was), when someone is depositing nearly a million dollars, i don't think the issue is with the exchange is because of gambling.

In fact, it would be probably easier to explain with gambling in one casino, then providing all the scattered wallet transfers and trading action on how you came up with that money in your wallet in the first place.

[hedgeh0g]

That user, with his 900k, should have been more prudent and grasped the gravity of the situation after all, scrutiny regarding the source of funds is constantly intensifying, and simple excuses no longer suffice one must provide concrete proof or a clear audit trail of the funds' origins. Perhaps soon, all forms of oversight including tax authorities will want to know everything about us; while this has long been the case in the US, it is not yet as developed in other countries. I believe many people even leave the US out of fear regarding tax law violations and other issues related to cryptocurrency. My point is that if a player was dealing with such massive sums, they should have prepared for a situation like this sooner or later.

[letteredhub]

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

Lesson learned for me from this is never to gamble on any offshore gambling site with the use of VPN where their TOS forbades it, the gambler might be assuming that the casino isn't watching because he's allowed to keep gambling so far as he's losing, but until a huge bet is won then it would be done on the gambler that the gambling site was watching all this time.

For a fake ID and VPN (if the casino is against it), not sure he has a case to win here.

[Sandra_hakeem]

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

This is exactly why we need to do due diligence and look around for reasons why so much funds were frozen by a CEX rather than making up stories around it. I'm assuming the casinos contacted them to make proper scrutiny on source of funds and proof of identity, which he failed to produce. CMIIW.

There was a similar topic that was made to ask if it was proper to circumvent casinos, with vpns and the rest and my input on this one remains the same. If a casino doesn't offer services in your region, it's best that you stay away from it because it's unlikely that you'll make it out with your withdrawals. $900k is a lot so let this be a lesson.

[len01]

I found this from reddit:



This is one reason why one should keep a detailed spreadsheet of your betting history.

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.

Either case, imho the issue to resolve is with the casino, not with the exchange. Exchange is just following the law and won't be accepting vague data, because it's their license on the line.

Why should you have to solve the problem with the casino when the exchange decided to freeze the money? On the other hand, it's not only the exchange. Popular casinos with a good reputation also will not accept fake customer information.

IMO, nobody needs to bother keeping all of their betting history because every gambling site already provides a betting history that users can check themselves whenever they want.

[348Judah]

I'm still wondering why having a detailed history of your betting should be a reason why your account should not be frozen, I just dislike the use of centralized platform for any reason be it and exchange or it can blame platform that supports for KYC.

You can't still escape it if you think you have passed through the first stage of their request and then you don't know what next you will be the Madden of you to do, all these are not enough measures to go against any form of illicites acquisition of fund.

[Swordsoffreedom]

I agree with this point. It is crucial to keep track of your own spreadsheet, proof of deposit and withdrawal and on chain transaction hash.

However there is another cardinal rule to remember alongside this.
Never transfer funds directly between a CEX and gambling site.
You should always use your own personal on chain wallet as an intermediary between exchange and casino.

I use MetaMask and Electrum for this purpose, so that exchange wallet doesn't get flagged for gambling related activity.

I agree with you that keeping clean transaction trail is important. But I would not call self custody a solution in this case.

If I send fund to Coinbase from my own wallet then Coinbase can still ask me where that money  came from. Intermediary wallet may actually add more transaction that I have to explain.

Anyway, using personal wallet is good for control and self custody. I like that. But we should not confuse privacy with compliance.

[Dareo]

-snip-

Actually, if it is such a big amount, I think it is better to check the AML score of that fund first with an AML check. By doing this, at least you can understand in advance whether that fund is really a good or bad fund. However I am surprised that how can anyone keep 900k in a central exchange. This is a huge amount, close to a million dollars. This amount of money should be kept in self-custody at most and if you keep as much as you need in the exchange, it is not a problem.
Since he himself did it for money laundering, there is nothing else to do here, Since he did illegal work he is already getting that punishment.

[Davidvictorson]

.

Either case, imho the issue to resolve is with the casino, not with the exchange. Exchange is just following the law and won't be accepting vague data, because it's their license on the line.

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?

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.

Thanks for the update.
So coin base hunch was correct.
If they hadn’t done it they would have been in trouble themselves.
The first thing I thought to myself when I read this was, not your keys not your coins. In any case , I am in support of coinbase here but that doesn’t stop the my strong belief that no one should have their coins sitting in a centralized exchange especially.

[mv1986]

This is very bad PR for Coinbase, honestly. But also, let us be honest with ourselves. Who will have allowed to have so much money in a centralized exchange like Coinbase? All that money was supposed to be transferred to a personal wallet. Anyways, it is not the person's fault. It is Coinbase's fault. And also, I believe the casino should take some responsibility and give us some kind of report so we can justify our winnings through the years so cases like this doesn't happen anymore. It's only my personal opinion about this situation.

Well, at this point nobody really knows whether he was about to sell the coins? Turn them into cash? I suppose he was fully KYCed on Coinbase, which is probably a main condition for having an account there at all, and maybe he didn't expect his account to get frozen like that by a publicly listed company where he is fully KYCed.

I am not saying it was particularly smart to deposit such a large amount there, it wasn't. Unless he had large amounts there before, similar amounts, and he was never confronted with such requests or could prove it in the past. We don't know the exact circumstances, but from a legal point of view, I think this is a highly interesting case.

If he can't obtain perfect documentation, in how far is Coinbase entitled to freeze those funds possibly forever? If he wasn't allowed to play at that casino, you know what?

Crazyyyyyy that he was able to withdraw $900,000 in the first place, we all here know how this usually plays out when somebody wins big at offshore casinos....

[cryptomaniac_xxx]

That is the thing, even if he is KYC and fully verified, you can't really trust those exchanges, specially with that huge amount of money. That could have been the flagged from them, that this account have been depositing huge amount and they will have to know where the source is.

Nevertheless, I reckon that every casinos have history of our betting right?

So maybe the person can request it to the casino themselves and give them the reasons why he needed that kind of data to give to Coinbase. Although it is still in the discretion of Coinbase after everything has been given to them whether to accept it or not.

[PostQuantumBTC]

That is the thing, even if he is KYC and fully verified, you can't really trust those exchanges, specially with that huge amount of money. That could have been the flagged from them, that this account have been depositing huge amount and they will have to know where the source is.

The amount of money is too huge to leave on an exchange. I also think the person made a mistake, he could have first sent the money to a self-hosted wallet and send just part of it to exchanges gradually if he wants to be converting it to fiat. If he is using a gambling site that is not in the US, I do not even know the reason he sent the money to Coinbase in the first place, but we do not truly know if he is using a gambling site that is not allowed in the US because Coinbase can freeze coins coming from gambling sites.

[Findingnemo]

-cut-
Never transfer funds directly between a CEX and gambling site.
You should always use your own personal on chain wallet as an intermediary between exchange and casino.

I use MetaMask and Electrum for this purpose, so that exchange wallet doesn't get flagged for gambling related activity.

Even if this wasn't money laundering (which it was), when someone is depositing nearly a million dollars, i don't think the issue is with the exchange is because of gambling.

In fact, it would be probably easier to explain with gambling in one casino, then providing all the scattered wallet transfers and trading action on how you came up with that money in your wallet in the first place.

Actually, it works the other way, coinbase detects the deposits and if it is coming from a gambling site which can be one or many), they will still block the account. Deposits from gambling and unregulated crypto platforms are restricted on Coinbase and when a user made a deposit they will lose their account with no further to appeal.

Coinbase follow this rule very strictly, and also many exchanges got similar rule so users should not deposit gambling rewards into centralized exchanges, better they use DEX or no KYC exchanges.

[Coyster]

If I send fund to Coinbase from my own wallet then Coinbase can still ask me where that money  came from. Intermediary wallet may actually add more transaction that I have to explain.

That's why you should never send a large amount of money into a custodial service in one go, that's literally asking for trouble, and more often than not, that's what you'd get. Say you win $200k in a casino and you get to withdraw that amount, it should go straight to your non-custodial wallet, that way you're sure it is now in your custody.

Now if you want to convert some of that money to fiat or another crypto, you break it into smaller amounts and send it one at a time, that's the safest way to do it.

[Royal Cap]

Actually, it works the other way, coinbase detects the deposits and if it is coming from a gambling site which can be one or many), they will still block the account. Deposits from gambling and unregulated crypto platforms are restricted on Coinbase and when a user made a deposit they will lose their account with no further to appeal.

Coinbase follow this rule very strictly, and also many exchanges got similar rule so users should not deposit gambling rewards into centralized exchanges, better they use DEX or no KYC exchanges.

Seriously, I really didn't know that we can't withdraw directly from a casino to Coinbase. Because I usually deposit and withdraw from my Binance exchanger to the casino site, because it's easy to convert stablecoins there. I haven't had any problems there.
Since I haven't used Coinbase for gambling yet. But your post was very helpful to me.  Coinbase is really strict..!

[boyptc]

I didn't used coinbase for a long time and now that they're in the S&P 500, I think that it's part of their management to become stricter with the money that comes in to them.

I did a quick look at that guy's profile and he seems to be really a big sports bettor. I wonder why he did that if he knows that exchanges like Coinbase are strict with gambling deposits.

[Merit.s]

Will I say over confidence on Coinbase will make some people turn it to their life saving account instead of getting a hardware wallet to keep such huge amount of money. Maybe, because he got them from gambling and didn't think straight to keep the money in his custody.

This is a huge amount of money and I don't think that this guy will get it back because he has no proof of how he got the funds.

[Taskford]

If I send fund to Coinbase from my own wallet then Coinbase can still ask me where that money  came from. Intermediary wallet may actually add more transaction that I have to explain.

That's why you should never send a large amount of money into a custodial service in one go, that's literally asking for trouble, and more often than not, that's what you'd get. Say you win $200k in a casino and you get to withdraw that amount, it should go straight to your non-custodial wallet, that way you're sure it is now in your custody.

Now if you want to convert some of that money to fiat or another crypto, you break it into smaller amounts and send it one at a time, that's the safest way to do it.

Yeah that's the huge mistake done by that user. Heavily regulated platform like Coinbase have tendency to asked such requirement.

To bad for the subject he can't provide the proof on where the funds came from. Maybe the only solution to do is to seek for lawyers help to settle up his case. Maybe by help of those professional the sportsbook might cooperate and give the documents he need.

Custodial wallets is truly risky and you are actually right that best to grab non custodial wallets if they like to hold their big funds for long time.