6 ms·

This might be a silly question, but did you use your Coinbase account to conduct any illegal transactions? The team there really cares about customer experience

This might be a silly question, but did you use your Coinbase account to conduct any illegal transactions? The team there really cares about customer experience, so generally if they are ignoring you it's because your account has some connection to illegal/banned activity, which they can't disclose due to ridiculous financial laws.

williamle8300 11y ago
yuup
- jessedhillon 11y ago
  Curious, why would you do that? Why wouldn't you transfer coins to a wallet you control and then conduct the transaction from there? Doing it from Coinbase throws away anonymity -- why not just buy your drugs with a Visa card then?
  - oxide 11y ago
    that's the recommended course of action, IIRC. personally, I prefer to do all my gray market drug purchases on the ol' regular internet with a prepaid debit card.
    - anon1mous 11y ago
      How do you get the prepaid card? Cameras are so cheap that practically every shop has them. Voice, face, body recognition are getting better by the week and can be run on all recordings.
mirimir 11y ago
What are some examples of "illegal transactions"? Under what jurisdiction? Arguably, anything is illegal somewhere, and is also legal somewhere else. Also, what do "conduct" and "some connection to" encompass? Are VPN services considered "illegal"? What about anonymous VPS rental? And what about gambling, in jurisdictions where it's legal? I get the sense that Coinbase is about as capricious as PayPal. And ought to be avoided for the same reasons.
- bpicolo 11y ago
  The jurisdiction in which Coinbase operates? This is a pretty lame argument
  - mirimir 11y ago
    Where it's headquartered? Or where it's doing business? Microsoft, for example, is making a strong distinction between its operations in the US vs Ireland.
    - adrianmacneil 11y ago
      Unfortunately, both. Because that is how financial laws work.
      - mirimir 11y ago
        That must get complicated. I see that Coinbase is incorporated in Delaware. Let's say that there's an online retailer of sex toys with a Coinbase account, and that they're incorporated in China. That business is legal in both the US and China, right? But what if they sell to customers in some nation where sex toys are illegal. Does that put their account at risk?
        adrianmacneil 11y ago
        It depends. If Coinbase doesn't have a presence in that country (registered company, licensing, employees) then they most likely don't need to follow their laws, and could make an argument that they are operating purely on a cross border basis. However, if Coinbase started advertising their services in that country, then that country's regulators might start getting upset (just as US regulators get upset with any company that supports online gambling, even if they are not based in the US).
- omni 11y ago
  > a bunch of waffling and trying to dodge the question Gonna go out on a limb here and assume that, yes, you did a bunch of illegal shit.
jsprogrammer 11y ago
How would Coinbase know anything about your transactions? Shouldn't they just process the exchange of necessary payment information?
- adrianmacneil 11y ago
  Well if you conduct transactions on their platform, then they know the source/destination, notes, amount etc. AML laws require them to detect and prevent illegal activity on their platform (just the same as Square, Stripe, Venmo/PayPal, your bank etc).
  - jsprogrammer 11y ago
    Based on that information it would seem the only illegal transactions there could be (that coinbase could detect) would be transactions over a certain amount (illegal, where?) or transactions with banned destinations (I believe HSBC used to [alledgedly they don't, now?] process transactions for Iran, as well as other banned destinations.). Is there a comprehensive list of banned destinations?
    - danneu 11y ago
      I most often hear about people getting banned for using bitcoin gambling sites within a hop of their coinbase account. For example, withdrawing from Coinbase straight to "1LuckyB5VGzdZLZSBZvw8DR17iiFCpST7L" as an obvious example. Though they are smarter about it than just static "bad address" lookup.
    - joosters 11y ago
      Bitcoin addresses for darknet marketplaces are easily available - e.g. https://www.walletexplorer.com/ https://www.walletexplorer.com/ Perhaps Coinbase will turn you away if they see you depositing money on a drugs market?
      - jandrese 11y ago
        It is ironic that Bitcoin is thought of as the criminals currency when it's one of the most trackable in the world.
ewillbefull 11y ago
They only appear to care about the customer experience when someone complains on social media, until then they have a history of being jerks to their users. They closed my account after I made a (relatively small) wire transfer after not using their service for a while. The year before I made much larger transfers that didn't seem to concern them. Suddenly I needed to provide them with lots of financial information. The law sucks and I don't blame them for this. But I have provided them with more than enough information to prove all of my income is legitimate, including years of tax forms regarding the income and other crap they absolutely did not need to look at. What bugs me is that they continued to ask me for this information, which took time for me to compile for them, and they ignored me anyway after I provided everything. Another thing that bugs me is that (they claim) their support desk software is the most secure method of sending them sensitive documents. Ridiculous. The icing on the cake will be when their system is hacked and I lose a lot of important documents that I was under the impression they would be removing, but clearly haven't.
- giancarlostoro 11y ago
  What's really odd about this (to me at least) is I've never had such an experience from any of my real banks.
  - ewillbefull 11y ago
    Same here. I've been through the KYC loops and I know how invasive they have to be occasionally. Coinbase took it to another level.
  - necessity 11y ago
    I and many other fellow countrymen have had that experience with Itaú (largest bank in the southern hemisphere). Paypal seems to be a popular source of complaints regarding frozen accounts too.
  - xkiwi 11y ago
    Real banks will ask you for Driver Licenses and SSN when you open a bank account with them. Information on DL has your height, eye color, address, telephone number, your photo, your finger prints. That's why they don't need to ask for your income again. However, I tried Coinbase and will not use them ever again.
CyberDildonics 11y ago
'Some connection' has seemed to mean more than two hops away, coinbase has decided that a transaction was for 'illegal' activity (I guess they play judge dredd in their own sandbox). I hope it isn't true, but by now I think I've seen a dozen or so closed account and no communication stories.
personjerry 11y ago
I thought Bitcoin transactions were supposed to be private or something? How would Coinbase know if your transaction was illegal?
- tjohns 11y ago
  Bitcoin is decentralized, but it's definitely not private. Every transaction is recorded publicly in the blockchain. Some folks are very good at backtracking to figure out how funds are flowing through the network. And sometimes it's not even hard, especially if you reuse a wallet's address for receiving funds across multiple transactions. In particular, there was an article alleging that Coinbase keeps a list of suspicious wallet addresses, and transacting with them will get your account banned. @gwern (who posts to HN sometimes) is reportedly one of the folks whose address is flagged as suspicious: http://truthvoice.com/2015/05/coinbase-accused-of-tracking-bitcoin-users-notifying-cops-of-transactions/ http://truthvoice.com/2015/05/coinbase-accused-of-tracking-b...
  - personjerry 11y ago
    But if the anonymity can be deciphered as such, then why does the Silk Road rely on Bitcoin?
    - Adlai 11y ago
      Bitcoin transactions are much harder to censor than conventional fiat transfers, but the transaction graph is completely transparent. Check out https://www.walletexplorer.com/ https://www.walletexplorer.com/

williamle8300 11y ago

yuup

jessedhillon 11y ago
Curious, why would you do that? Why wouldn't you transfer coins to a wallet you control and then conduct the transaction from there? Doing it from Coinbase throws away anonymity -- why not just buy your drugs with a Visa card then?
- oxide 11y ago
  that's the recommended course of action, IIRC. personally, I prefer to do all my gray market drug purchases on the ol' regular internet with a prepaid debit card.
  - anon1mous 11y ago
    How do you get the prepaid card? Cameras are so cheap that practically every shop has them. Voice, face, body recognition are getting better by the week and can be run on all recordings.

mirimir 11y ago

What are some examples of "illegal transactions"? Under what jurisdiction? Arguably, anything is illegal somewhere, and is also legal somewhere else. Also, what do "conduct" and "some connection to" encompass? Are VPN services considered "illegal"? What about anonymous VPS rental? And what about gambling, in jurisdictions where it's legal? I get the sense that Coinbase is about as capricious as PayPal. And ought to be avoided for the same reasons.

bpicolo 11y ago
The jurisdiction in which Coinbase operates? This is a pretty lame argument
- mirimir 11y ago
  Where it's headquartered? Or where it's doing business? Microsoft, for example, is making a strong distinction between its operations in the US vs Ireland.
  - adrianmacneil 11y ago
    Unfortunately, both. Because that is how financial laws work.
    - mirimir 11y ago
      That must get complicated. I see that Coinbase is incorporated in Delaware. Let's say that there's an online retailer of sex toys with a Coinbase account, and that they're incorporated in China. That business is legal in both the US and China, right? But what if they sell to customers in some nation where sex toys are illegal. Does that put their account at risk?
      - adrianmacneil 11y ago
        It depends. If Coinbase doesn't have a presence in that country (registered company, licensing, employees) then they most likely don't need to follow their laws, and could make an argument that they are operating purely on a cross border basis. However, if Coinbase started advertising their services in that country, then that country's regulators might start getting upset (just as US regulators get upset with any company that supports online gambling, even if they are not based in the US).
omni 11y ago
> a bunch of waffling and trying to dodge the question Gonna go out on a limb here and assume that, yes, you did a bunch of illegal shit.

jsprogrammer 11y ago

How would Coinbase know anything about your transactions? Shouldn't they just process the exchange of necessary payment information?

adrianmacneil 11y ago
Well if you conduct transactions on their platform, then they know the source/destination, notes, amount etc. AML laws require them to detect and prevent illegal activity on their platform (just the same as Square, Stripe, Venmo/PayPal, your bank etc).
- jsprogrammer 11y ago
  Based on that information it would seem the only illegal transactions there could be (that coinbase could detect) would be transactions over a certain amount (illegal, where?) or transactions with banned destinations (I believe HSBC used to [alledgedly they don't, now?] process transactions for Iran, as well as other banned destinations.). Is there a comprehensive list of banned destinations?
  - danneu 11y ago
    I most often hear about people getting banned for using bitcoin gambling sites within a hop of their coinbase account. For example, withdrawing from Coinbase straight to "1LuckyB5VGzdZLZSBZvw8DR17iiFCpST7L" as an obvious example. Though they are smarter about it than just static "bad address" lookup.
  - joosters 11y ago
    Bitcoin addresses for darknet marketplaces are easily available - e.g. https://www.walletexplorer.com/ https://www.walletexplorer.com/ Perhaps Coinbase will turn you away if they see you depositing money on a drugs market?
    - jandrese 11y ago
      It is ironic that Bitcoin is thought of as the criminals currency when it's one of the most trackable in the world.

ewillbefull 11y ago

They only appear to care about the customer experience when someone complains on social media, until then they have a history of being jerks to their users. They closed my account after I made a (relatively small) wire transfer after not using their service for a while. The year before I made much larger transfers that didn't seem to concern them. Suddenly I needed to provide them with lots of financial information. The law sucks and I don't blame them for this. But I have provided them with more than enough information to prove all of my income is legitimate, including years of tax forms regarding the income and other crap they absolutely did not need to look at. What bugs me is that they continued to ask me for this information, which took time for me to compile for them, and they ignored me anyway after I provided everything. Another thing that bugs me is that (they claim) their support desk software is the most secure method of sending them sensitive documents. Ridiculous. The icing on the cake will be when their system is hacked and I lose a lot of important documents that I was under the impression they would be removing, but clearly haven't.

giancarlostoro 11y ago
What's really odd about this (to me at least) is I've never had such an experience from any of my real banks.
- ewillbefull 11y ago
  Same here. I've been through the KYC loops and I know how invasive they have to be occasionally. Coinbase took it to another level.
- necessity 11y ago
  I and many other fellow countrymen have had that experience with Itaú (largest bank in the southern hemisphere). Paypal seems to be a popular source of complaints regarding frozen accounts too.
- xkiwi 11y ago
  Real banks will ask you for Driver Licenses and SSN when you open a bank account with them. Information on DL has your height, eye color, address, telephone number, your photo, your finger prints. That's why they don't need to ask for your income again. However, I tried Coinbase and will not use them ever again.

CyberDildonics 11y ago

'Some connection' has seemed to mean more than two hops away, coinbase has decided that a transaction was for 'illegal' activity (I guess they play judge dredd in their own sandbox). I hope it isn't true, but by now I think I've seen a dozen or so closed account and no communication stories.

personjerry 11y ago

I thought Bitcoin transactions were supposed to be private or something? How would Coinbase know if your transaction was illegal?

tjohns 11y ago
Bitcoin is decentralized, but it's definitely not private. Every transaction is recorded publicly in the blockchain. Some folks are very good at backtracking to figure out how funds are flowing through the network. And sometimes it's not even hard, especially if you reuse a wallet's address for receiving funds across multiple transactions. In particular, there was an article alleging that Coinbase keeps a list of suspicious wallet addresses, and transacting with them will get your account banned. @gwern (who posts to HN sometimes) is reportedly one of the folks whose address is flagged as suspicious: http://truthvoice.com/2015/05/coinbase-accused-of-tracking-bitcoin-users-notifying-cops-of-transactions/ http://truthvoice.com/2015/05/coinbase-accused-of-tracking-b...
- personjerry 11y ago
  But if the anonymity can be deciphered as such, then why does the Silk Road rely on Bitcoin?
  - Adlai 11y ago
    Bitcoin transactions are much harder to censor than conventional fiat transfers, but the transaction graph is completely transparent. Check out https://www.walletexplorer.com/ https://www.walletexplorer.com/