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From their terms of service: > Coinbase does not guarantee the value of bitcoin. You acknowledge that the price or value of bitcoin can change rapidly, decrea

by sheetjs 13y ago

From their terms of service: > Coinbase does not guarantee the value of bitcoin. You acknowledge that the price or value of bitcoin can change rapidly, decrease, and potentially even fall to zero. You acknowledge that holding bitcoin is high risk. You agree to deliver the agreed upon payment for bitcoin upon confirmation of an order, regardless of changes in bitcoin value. > Coinbase will make reasonable efforts to ensure that requests for electronic debits and credits involving bank accounts, credit cards, and check issuances are processed in a timely manner but Coinbase makes no representations or warranties regarding the amount of time needed to complete processing because Coinbase services are dependent upon many factors outside of our control, such as delays in the banking system or the U.S. or international mail service. It's possible that Coinbase is experiencing delays, and their terms of service give them a clear escape path. It sucks that they are holding onto your money, but consider this a learning experience: always start small, make sure everything smells right, and then scale up. If they were holding onto 35.10 rather than 35.10K, I suspect you would react differently

moocowduckquack 13y ago
If they were holding onto 35.10 rather than 35.10K, I suspect you would react differently The courts tend to as well.
- bushido 13y ago
  Actually you'd be wrong in this case as it is an illegal practice ("bucketing") whether due to a technical error, human error or malicious intent. The settlement amount may defer for the plaintiff, but the as it would be considered as/or similar to securities fraud the repercussions for the company could be dire.
  - oijaf888 13y ago
    What is "bucketing"? Isn't this a simple case of goods paid for but not received? This is the same as if I buy 100 gallons of fuel oil for $5 and they don't deliver it.
    - d23 13y ago
      No it isn't, because holding the assets is causing a depreciation in value for him.
      - oijaf888 13y ago
        So if I buy 100 gallons of fuel oil at $5/gallon, someone fails to deliver it to me on time and the price drops to $2/gallon, that's "bucketing"?
        aroch 13y ago
        No...Bucketing would be you buying 100gal of fuel through a broker for $5/gal and your broker in turn not buying your fuel until the price drops to, say, $4/gal. Thus they get to keep the $100 difference + their normal fees.
        oijaf888 13y ago
        Not saying this applies here, but assuming goods sold are delivered on time, does it matter what price and when they were purchased for sale? I can understand it not being legal in the case of brokerages that submit orders to an exchange but if I buy fuel (or sell a futures contract to buy fuel) the other end of that doesn't have to have the fuel at the time of agreeing to the contract, just when its delivered right? It transfers the price risk to the counter party which seems to be legal and how (to continue the example) most home heating oil companies work.
        bushido 13y ago
        I see where you are coming from here, and I will try and answer to the best of my abilities. There are multiple scenarios that you have opened to discussion each deals with different regulatory frameworks and the laws and scope change accordingly. Frankly any industry that comes under the purview of self-regulatory organizations and special regulatory bodies have a easier time contesting wrong doing. As this can get very lengthy I will just point you to the right resources where good information is available. In terms of futures it is correct that the other party does not need to possess the underlying commodity. In the US commodity futures and options trading comes under Commodity Futures Trading Commission[0]. With futures contracts institutions that you would initiate the trade through are required to maintain strict margins this is usually the case for speculators and small hedging operations. Most if not all trading platforms I have come across automatically close/roll-over the futures contract, thus delivery does not usually become a problem. If delivery does arise, the definition of delivery is not the traditional definition, you can read more about it at [1],[2] and [3]. In terms of a small purchase of physical crude oil from a middle man with upfront cash it comes down to the paperwork and the terms that were agreed to. For example if you were given a delivery date of 5th December with a guaranteed latest by 10th, and they failed to deliver you'll be able to take them to court if you feel the losses and hardship suffered due to the delay justifies the lawyer and court fees you would incur. In terms of a large shipment of crude (may also apply to a small purchase, but would be more trouble than necessary), the money is rarely given upfront but is usually on the basis of Letter of Credit(LC) issued by a financial institution that works similar to an Escrow, with the performance terms built-in. So in case of failure to deliver, damage etc. the monies released conform to the terms of the agreement. There is a ton of information available about how LCs work, start of with the wikipedia page [4], it would also help to learn how delivery works in international trade(Incoterms) [5]. [0] http://www.cftc.gov/index.htm http://www.cftc.gov/index.htm ---------- Futures ---------- [1] http://futures.tradingcharts.com/tafm/tafm10.html http://futures.tradingcharts.com/tafm/tafm10.html [2] http://investdaily.custhelp.com/app/answers/detail/a_id/450 http://investdaily.custhelp.com/app/answers/detail/a_id/450 [3] http://www.investopedia.com/terms/f/failuretodeliver.asp http://www.investopedia.com/terms/f/failuretodeliver.asp ---------- International Trade ---------- [4] http://en.wikipedia.org/wiki/Letter_of_credit http://en.wikipedia.org/wiki/Letter_of_credit [5] http://en.wikipedia.org/wiki/Incoterms http://en.wikipedia.org/wiki/Incoterms
bri3d 13y ago
The original poster does seem to have started small(er) before scaling up: https://news.ycombinator.com/item?id=6929954 https://news.ycombinator.com/item?id=6929954 .
- deleted 13y ago
  [deleted]
  - aroch 13y ago
    So if I buy $1 in BTC and then come back to buy $10 in BTC I must be some sort of billionaire gambler. There's nothing out of the ordinary with making large transactions with a company once you trust them. That being said, now that I've cashed out of BTC for a sizable profit I wont be touching it with a 10foot pole.
    - deleted 13y ago
      [deleted]
      - aroch 13y ago
        This isn't a credit card transcation, it was an ACH which almost every bank already confirms at send time (usually OTP SMS). In anycase, they're user not vendor initiated. Does AmEx call you if you buy a Ps4 or TV at Best Buy after only every buying a few $30-40 games? If so, you're in their high fraud risk group.
        deleted 13y ago
        [deleted]
fleitz 13y ago
Fuck their shitty TOS, call the SEC and have them investigate, they need to comply with the law. They are acting as financial services provider and must be in compliance with those laws. The law gives the OP a clear resolution. There's a pretty clear resolution here, give the customer back their money because your business doesn't actually work, or give the customer the coins at the most favorable price.
- sheetjs 13y ago
  BTC exchanges aren't regulated in the same way as stock exchanges. Coinbase isn't a BD AFAICT, so they don't have the same type of fiduciary responsibilities. They also aren't registered as a bank or as a NY private bank, so they aren't subject to FDIC or other banking regulations. They are much closer to ebay than to IB
  - richardlblair 13y ago
    In the recent senate hearing around Bitcoin everyone agreed that the current laws can and do apply to Bitcoin. Some modification is needed, but not much. At the end of the day, it's up to the judge.
  - fleitz 13y ago
    If you get it in front of a judge miraculous things can happen, if a judge finds as a matter of fact that they are an exchange than suddenly their more like IB than eBay. By guaranteeing a price they are acting as a counterparty to the transaction. That's the whole point of this, CoinBase doesn't want to be like IB so they should refund the customer his money rather than acting like a fraudulent IB. There are plenty of more serious operations like http://bitcoincapitalpartners.com http://bitcoincapitalpartners.com that take client money seriously.
- oijaf888 13y ago
  Which law? I can see something under non delivery of goods paid for but that would just be a civil court matter. If you order a car at your local dealership and then they don't give it to you, that's not something the SEC cares about.
Jormundir 13y ago
I guess the value fell to zero. :)
FireBeyond 13y ago
His complaint meets neither of those terms of service. Coinbase confirmed the banking side of things, and then failed to deliver the coins. As a result, the investor is taking a material loss solely due to Bitcoin's failure to deliver. You can't TOS a failure to deliver out of the equation. At the least, he should be entitled either to cash or Bitcoin credit for the difference in value between the delivery date and the actual delivery date.
- sheetjs 13y ago
  > As a result, the investor is taking a material loss solely due to Bitcoin's failure to deliver. They are very careful not to use the word "invest" or "investment" or even remotely suggest that BTC is an investment. They merely discuss buying and selling BTC. This is akin to a marketplace for buying and selling Magic the Gathering cards. An MtG exchange doesn't treat the Wrath of God cards as an investment; in the same way, Coinbase doesn't treat BTC as an investment.
  - makomk 13y ago
    He's taking a material loss regardless of whether he bought them as an investment or just to buy stuff with Bitcoins.
  - EGreg 13y ago
    In a court case, the breach of contract will be evaluated and the losses incurred will be relevant whether or not the assets are an "investment". What kind of law will apply is up for debate.
    - sheetjs 13y ago
      > breach of contract What breach of contract? Coinbase didn't agree to deliver by a specified date. I will emphasize the key phrase: > Coinbase makes no representations or warranties regarding the amount of time needed to complete processing There's a reason these CYA clauses exist. And the time frame (8 business days) isn't entirely unreasonable (in the sense that banks generally give themselves 3 days for ACH, with an additional 7 business day holding period if necessary). Downvoter: if there is some other contract that I am unaware of, please reply with a quote or link
revelation 13y ago
It's a TOS. Feel free to write whatever you want in there, because much of it will go straight to the trash if its ever tested in front of a court.

by sheetjs 13y ago

moocowduckquack 13y ago

If they were holding onto 35.10 rather than 35.10K, I suspect you would react differently The courts tend to as well.

bushido 13y ago
Actually you'd be wrong in this case as it is an illegal practice ("bucketing") whether due to a technical error, human error or malicious intent. The settlement amount may defer for the plaintiff, but the as it would be considered as/or similar to securities fraud the repercussions for the company could be dire.
- oijaf888 13y ago
  What is "bucketing"? Isn't this a simple case of goods paid for but not received? This is the same as if I buy 100 gallons of fuel oil for $5 and they don't deliver it.
  - d23 13y ago
    No it isn't, because holding the assets is causing a depreciation in value for him.
    - oijaf888 13y ago
      So if I buy 100 gallons of fuel oil at $5/gallon, someone fails to deliver it to me on time and the price drops to $2/gallon, that's "bucketing"?
      - aroch 13y ago
        No...Bucketing would be you buying 100gal of fuel through a broker for $5/gal and your broker in turn not buying your fuel until the price drops to, say, $4/gal. Thus they get to keep the $100 difference + their normal fees.
        oijaf888 13y ago
        Not saying this applies here, but assuming goods sold are delivered on time, does it matter what price and when they were purchased for sale? I can understand it not being legal in the case of brokerages that submit orders to an exchange but if I buy fuel (or sell a futures contract to buy fuel) the other end of that doesn't have to have the fuel at the time of agreeing to the contract, just when its delivered right? It transfers the price risk to the counter party which seems to be legal and how (to continue the example) most home heating oil companies work.
        bushido 13y ago
        I see where you are coming from here, and I will try and answer to the best of my abilities. There are multiple scenarios that you have opened to discussion each deals with different regulatory frameworks and the laws and scope change accordingly. Frankly any industry that comes under the purview of self-regulatory organizations and special regulatory bodies have a easier time contesting wrong doing. As this can get very lengthy I will just point you to the right resources where good information is available. In terms of futures it is correct that the other party does not need to possess the underlying commodity. In the US commodity futures and options trading comes under Commodity Futures Trading Commission[0]. With futures contracts institutions that you would initiate the trade through are required to maintain strict margins this is usually the case for speculators and small hedging operations. Most if not all trading platforms I have come across automatically close/roll-over the futures contract, thus delivery does not usually become a problem. If delivery does arise, the definition of delivery is not the traditional definition, you can read more about it at [1],[2] and [3]. In terms of a small purchase of physical crude oil from a middle man with upfront cash it comes down to the paperwork and the terms that were agreed to. For example if you were given a delivery date of 5th December with a guaranteed latest by 10th, and they failed to deliver you'll be able to take them to court if you feel the losses and hardship suffered due to the delay justifies the lawyer and court fees you would incur. In terms of a large shipment of crude (may also apply to a small purchase, but would be more trouble than necessary), the money is rarely given upfront but is usually on the basis of Letter of Credit(LC) issued by a financial institution that works similar to an Escrow, with the performance terms built-in. So in case of failure to deliver, damage etc. the monies released conform to the terms of the agreement. There is a ton of information available about how LCs work, start of with the wikipedia page [4], it would also help to learn how delivery works in international trade(Incoterms) [5]. [0] http://www.cftc.gov/index.htm http://www.cftc.gov/index.htm ---------- Futures ---------- [1] http://futures.tradingcharts.com/tafm/tafm10.html http://futures.tradingcharts.com/tafm/tafm10.html [2] http://investdaily.custhelp.com/app/answers/detail/a_id/450 http://investdaily.custhelp.com/app/answers/detail/a_id/450 [3] http://www.investopedia.com/terms/f/failuretodeliver.asp http://www.investopedia.com/terms/f/failuretodeliver.asp ---------- International Trade ---------- [4] http://en.wikipedia.org/wiki/Letter_of_credit http://en.wikipedia.org/wiki/Letter_of_credit [5] http://en.wikipedia.org/wiki/Incoterms http://en.wikipedia.org/wiki/Incoterms

bri3d 13y ago

The original poster does seem to have started small(er) before scaling up: https://news.ycombinator.com/item?id=6929954 https://news.ycombinator.com/item?id=6929954 .

deleted 13y ago
[deleted]
- aroch 13y ago
  So if I buy $1 in BTC and then come back to buy $10 in BTC I must be some sort of billionaire gambler. There's nothing out of the ordinary with making large transactions with a company once you trust them. That being said, now that I've cashed out of BTC for a sizable profit I wont be touching it with a 10foot pole.
  - deleted 13y ago
    [deleted]
    - aroch 13y ago
      This isn't a credit card transcation, it was an ACH which almost every bank already confirms at send time (usually OTP SMS). In anycase, they're user not vendor initiated. Does AmEx call you if you buy a Ps4 or TV at Best Buy after only every buying a few $30-40 games? If so, you're in their high fraud risk group.
      - deleted 13y ago
        [deleted]

fleitz 13y ago

Fuck their shitty TOS, call the SEC and have them investigate, they need to comply with the law. They are acting as financial services provider and must be in compliance with those laws. The law gives the OP a clear resolution. There's a pretty clear resolution here, give the customer back their money because your business doesn't actually work, or give the customer the coins at the most favorable price.

sheetjs 13y ago
BTC exchanges aren't regulated in the same way as stock exchanges. Coinbase isn't a BD AFAICT, so they don't have the same type of fiduciary responsibilities. They also aren't registered as a bank or as a NY private bank, so they aren't subject to FDIC or other banking regulations. They are much closer to ebay than to IB
- richardlblair 13y ago
  In the recent senate hearing around Bitcoin everyone agreed that the current laws can and do apply to Bitcoin. Some modification is needed, but not much. At the end of the day, it's up to the judge.
- fleitz 13y ago
  If you get it in front of a judge miraculous things can happen, if a judge finds as a matter of fact that they are an exchange than suddenly their more like IB than eBay. By guaranteeing a price they are acting as a counterparty to the transaction. That's the whole point of this, CoinBase doesn't want to be like IB so they should refund the customer his money rather than acting like a fraudulent IB. There are plenty of more serious operations like http://bitcoincapitalpartners.com http://bitcoincapitalpartners.com that take client money seriously.
oijaf888 13y ago
Which law? I can see something under non delivery of goods paid for but that would just be a civil court matter. If you order a car at your local dealership and then they don't give it to you, that's not something the SEC cares about.

Jormundir 13y ago

I guess the value fell to zero. :)

FireBeyond 13y ago

His complaint meets neither of those terms of service. Coinbase confirmed the banking side of things, and then failed to deliver the coins. As a result, the investor is taking a material loss solely due to Bitcoin's failure to deliver. You can't TOS a failure to deliver out of the equation. At the least, he should be entitled either to cash or Bitcoin credit for the difference in value between the delivery date and the actual delivery date.

sheetjs 13y ago
> As a result, the investor is taking a material loss solely due to Bitcoin's failure to deliver. They are very careful not to use the word "invest" or "investment" or even remotely suggest that BTC is an investment. They merely discuss buying and selling BTC. This is akin to a marketplace for buying and selling Magic the Gathering cards. An MtG exchange doesn't treat the Wrath of God cards as an investment; in the same way, Coinbase doesn't treat BTC as an investment.
- makomk 13y ago
  He's taking a material loss regardless of whether he bought them as an investment or just to buy stuff with Bitcoins.
- EGreg 13y ago
  In a court case, the breach of contract will be evaluated and the losses incurred will be relevant whether or not the assets are an "investment". What kind of law will apply is up for debate.
  - sheetjs 13y ago
    > breach of contract What breach of contract? Coinbase didn't agree to deliver by a specified date. I will emphasize the key phrase: > Coinbase makes no representations or warranties regarding the amount of time needed to complete processing There's a reason these CYA clauses exist. And the time frame (8 business days) isn't entirely unreasonable (in the sense that banks generally give themselves 3 days for ACH, with an additional 7 business day holding period if necessary). Downvoter: if there is some other contract that I am unaware of, please reply with a quote or link

revelation 13y ago

It's a TOS. Feel free to write whatever you want in there, because much of it will go straight to the trash if its ever tested in front of a court.