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I don't blame them in the slightest for this. The "immutable" (for lack of a better term) nature of many cryptocurrencies means that any purchases made on credi

I don't blame them in the slightest for this. The "immutable" (for lack of a better term) nature of many cryptocurrencies means that any purchases made on credit can't be easily taken back. And I'm pretty sure it's always been "technically not allowed" to buy another currency with credit cards (or it's technically allowed, but treated as a "cash advance")

gruez 9y ago
>And I'm pretty sure it's always been "technically not allowed" to buy another currency with credit cards. but you could always buy gold/silver and other extremely liquid and fungible goods, which is as good as money.
- deleted 9y ago
  [deleted]
- swiley 9y ago
  As good as money is a bit of a stretch.
- Klathmon 9y ago
  Yes, but if the act of buying any of those on a credit card became common enough that they started seeing the problems from them, I guarantee that they would be banned as well. They can't whitelist what you can buy with a credit card, so instead they blacklist things when they become big enough to matter.
- pjc50 9y ago
  .. subject to the usual processes, which require either a mailing address, an in-person transaction, or extended verification.
hkmurakami 9y ago
Didn't the SEC / IRS rule that crytocurrencies are an asset rather than a currency though?
- dragonwriter 9y ago
  > Didn't the SEC / IRS rule that crytocurrencies are an asset rather than a currency though? Mm The IRS decided that that's the category they fall into for certain tax purposes. Not sure why that would have any bearing on the application of credit card issuer policies that are not tied to the particular definitions in the tax code, though.
- splintercell 9y ago
  That makes no difference to the conversation in hand. What parent is saying that unlike other purchases with credit cards, you can't really do much about cryptocurrencies. For instance if you purchased a physical product, in case of a problem (like fraud or something), at least you can go to the place where the delivery of the physical product happened and find it. Similarly in case of a digital good (like ebook or pdf, since it's mostly copied from one destination to the other) if the product wasn't delivered, then it can be redelivered with no cost to the producer. It's the first time we are encountering a digital good with non-duplicability of physical world goods with hard tracability of cash.
  - wolco 9y ago
    If that was applied to food both would have a similiar issue with the return ability
deleted 9y ago
[deleted]
dawhizkid 9y ago
Is that true? If coinbase detects a chargeback due to fraud from a bitcoin purchase in your account couldn’t they just freeze your account and prevent any outbound transfer from happening?
- charlesdm 9y ago
  Say this account gets hacked. Hacker purchases $1000 worth of Bitcoin or Ethereum and transfers this to a random wallet on the network. Now a chargeback leaves someone paying the bill, because the BTC or ETH can't be recovered.
- Zelizz 9y ago
  They could, but you could have already transferred the funds to another wallet they don't control.
  - dawhizkid 9y ago
    I assume they have a fraud check for outbound transfers to delay or reject but yes for false negatives this is possible.
    - root_axis 9y ago
      There is no such fraud check for outbound transfers. A 3 month delay would be completely impractical anyway.
- deleted 9y ago
  [deleted]
- pjc50 9y ago
  Chargebacks may arrive at the merchant up to about 3 months from the transaction.
  - tzs 9y ago
    That's too low. The baseline for most credit cards is 120 days for the cardholder to dispute a charge in the US, or 180 days internationally. Some specific dispute categories for some credit cards have a shorter limit, and some effectively have longer limits because the starting point is some date after the transaction. On top of that, there may be consumer protection laws in some areas that affect this. For example, in California it is one year for certain types of dispute [1]. Note that the above is how long for the cardholder to dispute the charge. Add to that however long it takes the card company to process things before the merchant sees the chargeback. I've seen one that arrived at the merchant over a year after the transaction, although I think that is rare. [1] https://oag.ca.gov/consumers/general/credit-cards-dispute-charge https://oag.ca.gov/consumers/general/credit-cards-dispute-ch...
patrickg_zill 9y ago
Same thing with concert tickets though? Buy tickets for the next day, and within 48 hours there is no way to take it back. And these are not currencies under the law.
- root_axis 9y ago
  It's not at all the same thing. The incentive for most people to buy concert tickets is to see the concert or scalp the tickets; chargebacks that occur in this context are on an individual basis and the banks will ban customers that abuse this chargeback process. In some cases, the merchant may be at fault, perhaps selling tickets to a show that does not transpire as described and the concert-goers may issue chargebacks en masse in response, but in this case the banks identify the source of the problem was not _the individuals_ (who will probably have relatively few if any chargebacks in their account history) and will actually penalize the merchant, sometimes banning them altogether if they cannot reasonably explain the chargeback behavior or if chargebacks become a pattern for that merchant. With blockchain tokens there is no incentive except profit, so if the blockchain token markets create a panic among buyers, it can cause mass chargebacks at _any_ time within the chargeback window, this is clearly a completely different risk model than concert tickets. At the end of the day, all that's really happening here is the credit card companies are banning transactions from merchants with high chargeback history, a totally common practice.
  - patrickg_zill 9y ago
    Your argument makes no sense and provides no evidence. Chargebacks can be initiated at any time within the chargeback window, regardless of what is purchased. Further, chargebacks hurt the MERCHANT. MERCHANTS are the ones banned and blacklisted (there is a blacklist file shared among all VISA issuers) for bad behavior. IF merchants had high chargebacks, they would state that - there is no NDA preventing the card issuers from stating it. And even if there were, there are higher-risk tiers for such merchants (like merchants that sell online porn). How much experience do you have dealing with VISA etc. ...?
    - 9y ago

gruez 9y ago

>And I'm pretty sure it's always been "technically not allowed" to buy another currency with credit cards. but you could always buy gold/silver and other extremely liquid and fungible goods, which is as good as money.

deleted 9y ago
[deleted]
swiley 9y ago
As good as money is a bit of a stretch.
Klathmon 9y ago
Yes, but if the act of buying any of those on a credit card became common enough that they started seeing the problems from them, I guarantee that they would be banned as well. They can't whitelist what you can buy with a credit card, so instead they blacklist things when they become big enough to matter.
pjc50 9y ago
.. subject to the usual processes, which require either a mailing address, an in-person transaction, or extended verification.

hkmurakami 9y ago

Didn't the SEC / IRS rule that crytocurrencies are an asset rather than a currency though?

dragonwriter 9y ago
> Didn't the SEC / IRS rule that crytocurrencies are an asset rather than a currency though? Mm The IRS decided that that's the category they fall into for certain tax purposes. Not sure why that would have any bearing on the application of credit card issuer policies that are not tied to the particular definitions in the tax code, though.
splintercell 9y ago
That makes no difference to the conversation in hand. What parent is saying that unlike other purchases with credit cards, you can't really do much about cryptocurrencies. For instance if you purchased a physical product, in case of a problem (like fraud or something), at least you can go to the place where the delivery of the physical product happened and find it. Similarly in case of a digital good (like ebook or pdf, since it's mostly copied from one destination to the other) if the product wasn't delivered, then it can be redelivered with no cost to the producer. It's the first time we are encountering a digital good with non-duplicability of physical world goods with hard tracability of cash.
- wolco 9y ago
  If that was applied to food both would have a similiar issue with the return ability

deleted 9y ago

[deleted]

dawhizkid 9y ago

Is that true? If coinbase detects a chargeback due to fraud from a bitcoin purchase in your account couldn’t they just freeze your account and prevent any outbound transfer from happening?

charlesdm 9y ago
Say this account gets hacked. Hacker purchases $1000 worth of Bitcoin or Ethereum and transfers this to a random wallet on the network. Now a chargeback leaves someone paying the bill, because the BTC or ETH can't be recovered.
Zelizz 9y ago
They could, but you could have already transferred the funds to another wallet they don't control.
- dawhizkid 9y ago
  I assume they have a fraud check for outbound transfers to delay or reject but yes for false negatives this is possible.
  - root_axis 9y ago
    There is no such fraud check for outbound transfers. A 3 month delay would be completely impractical anyway.
deleted 9y ago
[deleted]
pjc50 9y ago
Chargebacks may arrive at the merchant up to about 3 months from the transaction.
- tzs 9y ago
  That's too low. The baseline for most credit cards is 120 days for the cardholder to dispute a charge in the US, or 180 days internationally. Some specific dispute categories for some credit cards have a shorter limit, and some effectively have longer limits because the starting point is some date after the transaction. On top of that, there may be consumer protection laws in some areas that affect this. For example, in California it is one year for certain types of dispute [1]. Note that the above is how long for the cardholder to dispute the charge. Add to that however long it takes the card company to process things before the merchant sees the chargeback. I've seen one that arrived at the merchant over a year after the transaction, although I think that is rare. [1] https://oag.ca.gov/consumers/general/credit-cards-dispute-charge https://oag.ca.gov/consumers/general/credit-cards-dispute-ch...

patrickg_zill 9y ago

Same thing with concert tickets though? Buy tickets for the next day, and within 48 hours there is no way to take it back. And these are not currencies under the law.

root_axis 9y ago
It's not at all the same thing. The incentive for most people to buy concert tickets is to see the concert or scalp the tickets; chargebacks that occur in this context are on an individual basis and the banks will ban customers that abuse this chargeback process. In some cases, the merchant may be at fault, perhaps selling tickets to a show that does not transpire as described and the concert-goers may issue chargebacks en masse in response, but in this case the banks identify the source of the problem was not _the individuals_ (who will probably have relatively few if any chargebacks in their account history) and will actually penalize the merchant, sometimes banning them altogether if they cannot reasonably explain the chargeback behavior or if chargebacks become a pattern for that merchant. With blockchain tokens there is no incentive except profit, so if the blockchain token markets create a panic among buyers, it can cause mass chargebacks at _any_ time within the chargeback window, this is clearly a completely different risk model than concert tickets. At the end of the day, all that's really happening here is the credit card companies are banning transactions from merchants with high chargeback history, a totally common practice.
- patrickg_zill 9y ago
  Your argument makes no sense and provides no evidence. Chargebacks can be initiated at any time within the chargeback window, regardless of what is purchased. Further, chargebacks hurt the MERCHANT. MERCHANTS are the ones banned and blacklisted (there is a blacklist file shared among all VISA issuers) for bad behavior. IF merchants had high chargebacks, they would state that - there is no NDA preventing the card issuers from stating it. And even if there were, there are higher-risk tiers for such merchants (like merchants that sell online porn). How much experience do you have dealing with VISA etc. ...?
  - 9y ago