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

[Hispo]

.

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.

If this was an attempt to launder up to 900 thousands dollars, there is something I don't understand quite yet... Why would the criminal/money launderer try to change his situation and recover his master's money by opening a thread on reddit and crying about what just happened to him?
Was he expecting his story to go viral and have Coinbase to change their opinion just because he was caught and opened a thread on reddit?
It sounds rather silly if you think it carefully...

[oll]

Personally, I don't consider a VPN a violation. Yes, this guy most likely forged documents, as the guys who examined his post history noted. But a VPN is what many gamblers use simply to access their favorite online casino games. Apparently, Coinbase is so strict that they've listed this as a violation in the Terms of Service, which every gambler accepts when they log in. But as I already noted, this guy's problem was a serious violation of KYC/AML rules, and exchanges ban people quite harshly for that. I think he used AI to forge documents, which means he's already aligned with methods that would be banned by any exchange or online casino.

[KTChampions]

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

I don't understand how this allows the exchange (Coinbase) to steal his money  
Why do people think it's normal for someone to make a deposit, and then, in order to get it back, they have to dance like a clown and do a million things to prove that these are their funds and that they didn't violate any laws 200 transactions ago?
I certainly understand that there is some regulatory rule requiring (or permitting) the exchange to act this way, but that doesn't stop me from considering such actions fraud.

[Findingnemo]

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..!

Exchange to casino, there is no issues but you will face problems when you make a deposit from casino to exchange and it doesn't mean direct deposit alone, no matter how many hops it does on your personal wallet before entering the coinbase.

For example you withdraw to your electrum wallet and transfer it to another your electrum wallet and then deposit to coinbase to break the trail but it doesn't end there and still coinbase can track the transaction upto 10 previous hops if I am not based on the replies I read from the forum in all these years.

So the best alternative is to use instant swaps or decentralized exchanges to convert rewards from casinos to fiat.

[Cgrexp]

This is irresponsible handling of one's funds, keeping it from an exchange that prohibits funds coming from gambling platforms. Betting history will not help; his only option is to get a lawyer and exhaust every possible means to get the funds back, but I doubt if he'll get the whole amount. Coinbase has a good reason to withhold it, or they may send a portion of the funds for consideration, depending on how the lawyer handles the case.
This is another case of not reading the terms and not having a method to safely store funds coming from a gambling platform

Before sending money received from a gambling or betting platform to such an exchange, the terms and conditions of the exchange should have been carefully checked. The betting history or transaction record may not be sufficient as legal evidence on its own, but it can be a helpful document to understand the source of the money and the continuity of the entire transaction. If the money was acquired legally, these records can be useful for a lawyer to analyze the matter. The practical step is to evaluate the matter legally.hiring a lawyer is not be a guarantee that the full amount will be returned. You should also understand their terms and conditions for sending money and restrictions on gambling-related transactions. It is important to have a clear idea in advance of how the money received from the betting platform can be transferred. If the money is sent to the wrong place and gets stuck, it may not always be possible to solve the problem later by simply showing the transaction history.

[macson]

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

If that's the case, it means he's just digging his own grave. He knows what he's doing is against the rules, but he acts like nothing's going to happen. He thinks he's smarter than the system, when really it's only a matter of time before his money gets frozen. At this point, Coinbase is pretty lucky to be getting 'free money' from him. Let's just say he made his own problems and is paying a hefty price for it.

[Y3shot]

Coinbase already had enough suspicion about the source of his funds and not just on this single occasion maybe there has been some speculation about him before they locked the account but truth is that they would never have contacted him about it before the action. However, with the uncovering that he uses fake ID which that is supposed to be an offence he has no chance of getting that money back. But on the side of coinbase it very much a bad review for them because locking someone’s funds just because they don’t agree with the prove even though it exist doesn’t seem well with me since it just the fact that he can’t obtain for a year but has obtained a level of evidence it’s then unfair in my opinion.

If they already have an existing rule for freezing one's account if found cheating, I think they are on the safe side because the rule is already there; it doesn't really matter how much was found in the account.
One of the challenges that can bring a bad review to the casino is handling cases with no existing rule. This person can look for a way for the money to be recovered if it is positive, and if it is possible, this is gonna take a lot of time, which can make one feel very exhausted.

[Dr.Bitcoin_Strange]

Assuming that this money was even won from offshore casino as he claimed, what is his reason for withdrawing $900k to an exchange? Meanwhile he could have just withdraw the money to a self custody wallet and then only send a small amount to the exchange. It's not possible that he wants to convert all the money to his local currency, so the question is why did he with such huge amount into an exchange. Since a member already said it's a case of money laundering, I guess that's why he sent the money to the exchange and probably wants to trade it to another asset before withdrawing it again.

Personally, if I win $5k from a casino, there's no way I am withdrawing it all into a centralized exchange, maybe I could just send only the amount I want to use into the exchange but the rest will go to a self custody wallet until I want to use it.

[YOSHIE]

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

Actually, the Coinbase exchange is not at fault, in fact they have given warnings to gamblers who make transactions from online casinos to Coinbase and vice versa.

I think the ranking of the exchange Coinbase should be published here, so that we understand the situation.

Crypto exchange Coinbase strictly prohibits any form of transactions related to unauthorized gambling through their platform. This policy is implemented to comply with international financial regulations as well as the rules of the Financial Crimes Law Enforcement Network (FinCEN) in the United States.

If it is not detected by Coinbase when sending or receiving crypto assets directly from gambling sites, this is an experience and lesson for gamblers who use the Coinbase exchange for crypto transactions.

Warning:

As a regulated bank, Coinbase is required to monitor the transaction behavior of its users. If there are indications of money laundering or funding of illegal activities through the gambling platform, Coinbase may share such transaction data with legal authorities such as FinCEN or relevant tax agencies (IRS in the US).

[MisFoxie]

-snip-

Okay then it was an attempt of money laundering. That’s why I say why would a person without power keep million dollars on a centralized exchange and why they directly transfer funds from a casino to that account. I personally never withdraw directly from a normal casino to an exchange.

Even if this wasn’t a money laundering case if the exchange restricts the account even once then he would have to go through a lot of hassle to get the account back to normal. It could even be that the exchange never makes the account regular again.

[Die_empty]

Personally, I don't consider a VPN a violation. Yes, this guy most likely forged documents, as the guys who examined his post history noted. But a VPN is what many gamblers use simply to access their favorite online casino games. Apparently, Coinbase is so strict that they've listed this as a violation in the Terms of Service, which every gambler accepts when they log in. But as I already noted, this guy's problem was a serious violation of KYC/AML rules, and exchanges ban people quite harshly for that. I think he used AI to forge documents, which means he's already aligned with methods that would be banned by any exchange or online casino.

The OP didn't use a VPN to register on Coinbase. Rather, he was using VPN to gamble on some platforms, and the money was sent to Coinbase. 

Coinbase wants him to submit official betting history and documentation to prove he owns the money. These casinos might not give him these documents because he was violating their laws and using a fake ID.

He who goes to equity must go with clean hands. He might end up losing the amount since he doesn't have good standing with the law.

[5W-KILO]

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

But he made the bets and won right? Coinbase just sees this as an opportunity to grab the money for themselves since the affected personal isn't also clean himself.

He has learned a very sad lesson, this is why you need to be truthful in everything you do, why is he using VPN to place bet? Why the fake ID too? I can't say he deserved it but I might, because he had all the chances to have slowly withdraw his money from Coinbase.

The lesson number 2 is never trust any centralised exchanges with your money, clean or not clean I don't care, always take your money off exchanges either big or small, these people owns the key of every deposit account on the exchanges.

[Jerrycrypto2024]

Personally, I don't consider a VPN a violation. Yes, this guy most likely forged documents, as the guys who examined his post history noted. But a VPN is what many gamblers use simply to access their favorite online casino games. Apparently, Coinbase is so strict that they've listed this as a violation in the Terms of Service, which every gambler accepts when they log in. But as I already noted, this guy's problem was a serious violation of KYC/AML rules, and exchanges ban people quite harshly for that. I think he used AI to forge documents, which means he's already aligned with methods that would be banned by any exchange or online casino.

The OP didn't use a VPN to register on Coinbase. Rather, he was using VPN to gamble on some platforms, and the money was sent to Coinbase. 

Coinbase wants him to submit official betting history and documentation to prove he owns the money. These casinos might not give him these documents because he was violating their laws and using a fake ID.

He who goes to equity must go with clean hands. He might end up losing the amount since he doesn't have good standing with the law.

Well your analysis clarify me more on the matter, it's clear that violation exist between the two parties, one will not blame much on the casino, though one is bound to make mistake but it's assume the instructions where read by him before undertaking or entering the deal, but if the casino is also ready to help there must be a way of getting the details straight where any errors could be corrected, either by ensuring if the user did it intensional or at the course of mistake, if Coinbase don't bend to their rules blaming then will be hard .

[DrBeer]

Why wasn't I surprised by the ending of this story?! I don't idolize stock exchanges, but criminals always try to manipulate people and "play on their pity" by hiding behind stories like this, influencing public opinion.
It’s also interesting- what was he counting on? That the exchange would give him his money back? To throw a tantrum in an attempt to damage the exchange’s reputation? Something tells me the exchange will have some strong arguments… What are people hoping for!?

[Smartprofit]

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

But he made the bets and won right? Coinbase just sees this as an opportunity to grab the money for themselves since the affected personal isn't also clean himself.

He has learned a very sad lesson, this is why you need to be truthful in everything you do, why is he using VPN to place bet? Why the fake ID too? I can't say he deserved it but I might, because he had all the chances to have slowly withdraw his money from Coinbase.

The lesson number 2 is never trust any centralised exchanges with your money, clean or not clean I don't care, always take your money off exchanges either big or small, these people owns the key of every deposit account on the exchanges.

Honesty is a very good human quality. The desire to be honest in all your actions, in my opinion, deserves every praise! 🙋

However, I would like to point out that VPN technology itself is designed not so much for maintaining privacy (although, on the other hand, what's wrong with wanting to keep your personal life private?), but rather for creating a secure internet connection. Many people use VPNs for precisely this purpose. It's one of the most important elements of personal cybersecurity.

Furthermore, this story involves ID forgery... I condemn such actions. Document forgery is a criminal offense in many countries. And in general, it's not very good... Maintaining privacy is one thing, but impersonating someone else is quite another.

On the other hand, I am against KYC and AML procedures. I support the free flow of information, technology, and capital.  I wondered why this user wasn't allowed to withdraw his winnings from the bookmaker at all, and why did he resort to such tricks as forging an ID?

Next, there's the $900,000 transfer to Coinbase... An action, in my opinion, absolutely unthinkable for a professional scammer! After all, everyone knows it's a centralized exchange with strict rules.

And finally, the last question: Who will ultimately own this money? Will it really remain the property of Coinbase? For some reason, I remembered the joke about the little boy who one day saw what his parents were doing in their bedroom and said, "And these are the same people who forbid me from picking my nose!"💁

[sompitonov]

Why wasn't I surprised by the ending of this story?! I don't idolize stock exchanges, but criminals always try to manipulate people and "play on their pity" by hiding behind stories like this, influencing public opinion.
It’s also interesting- what was he counting on? That the exchange would give him his money back? To throw a tantrum in an attempt to damage the exchange’s reputation? Something tells me the exchange will have some strong arguments… What are people hoping for!?

I imagine there are countless stories involving such large sums that never make it to forum threads or public discussion perhaps because the users involved failed to pay taxes in their home countries or for other reasons, and they realize that recovery is unlikely and the effort largely futile. Even when such stories do go public, there is only a minuscule chance the exchange will take notice and I remain skeptical that they would. If media outlets and social networks were flooded with these accounts, people might think twice however, since such stories surface only occasionally, there is no significant exodus of users from the exchange. People often assume these issues happen to someone else far removed from their own lives and not to them ultimately, everyone is focused on themselves.

[Smack That Ace]

what is his reason for withdrawing $900k to an exchange?

If we consider $900k to be legitimate gambling winning then there could be several possible reason for transferring it to exchange. The user might view these fund as free money and look to convert them to fiat asap, engage in OTC trading, prepare for tax payment, swap them for other asset or simply use exchange as source of liquidity. Naturally transferring such large amount to any CEX all at once is bound to trigger compliance red flag. However red flag is not same thing as proof of criminal intent. I don't know if Coinbase imposed restriction solely because funds originated from gambling, they might have detected other suspicious activity and requested documentation as a result.

[Churchillvv]

Snip

If they already have an existing rule for freezing one's account if found cheating, I think they are on the safe side because the rule is already there; it doesn't really matter how much was found in the account.
One of the challenges that can bring a bad review to the casino is handling cases with no existing rule. This person can look for a way for the money to be recovered if it is positive, and if it is possible, this is gonna take a lot of time, which can make one feel very exhausted.

Of course they have rules and regulations that people should abide by and it includes freezing funds with suspected source or funds from countries which has ban placed on them. This rules allow them to take action against anyone regardless of who is it. So that’s why they had to freeze the funds but where the became unfair is where they ignore his evidence because he can’t provide proof that is up to a year of betting history, that is a very serious violation, but that is also a contributory crime since but have hand in what the guy used fake id etc.

[Ambatman]

My honest opinion is Coinbase is a shit site with too strict regulations. They are giving me a hard time over $1800, literally less than $2000 and they want all these 1040 forms, bank statement, proof of wealth bs. I told em kiss my ass and close my account if they want all that over 2k.

Now if this guy had 900k in his account, how did he not get any warning before building the balance to that amount? They were after documents from me within a week.

Nothing new
I have faced same issue quite alot of times with binance
Usually a warning and suspension but they are usually annoying.
Now I just make use of wallets though gets annoying dealing with stable coins.
Coinbase, gambling and off shores doesn't mix well.

[Alphakilo]

what is his reason for withdrawing $900k to an exchange?

If we consider $900k to be legitimate gambling winning then there could be several possible reason for transferring it to exchange. The user might view these fund as free money and look to convert them to fiat asap, engage in OTC trading, prepare for tax payment, swap them for other asset or simply use exchange as source of liquidity. Naturally transferring such large amount to any CEX all at once is bound to trigger compliance red flag. However red flag is not same thing as proof of criminal intent. I don't know if Coinbase imposed restriction solely because funds originated from gambling, they might have detected other suspicious activity and requested documentation as a result.

The amount is just too big to even send to an exchange account that may have been receiving far lesser amount in the past, and that's why there's a huge red flag on that amount even if such a person had completed kyc requirements in the past.
So far the comments I have read, the gambler made a very wrong decision without thinking that such a freeze could happen and without remembering that he used VPN and even fake ID in the sites he gambled on to win this amount.
It pays to be cautious and do things by the book Incase of such issues that arise, so as to have legal proof that even the law would stand behind you.
This is just a warning to those who gamble on offshore platforms and use fake ID or VPN on sites that don't allow it mostly as it concerns crypto currencies that is much watched these days.