Well, it's not too hard to see how it works. I validate my bank account. I initiate transaction on my end, they buy bitcoins on their end and wait few days for my money to reach them. They tell you it has to take a week or longer and gives u specific date. Since bitcoin is so volatile, big changes can happen in a week.
IF bitcoin goes up, they cancel my transaction and say it is "high risk" and initiate a return of my money. IF bitcoin goes down they allow transaction to stay and they keep my money and give me the bitcoins.
It is common sense. Obviously they're not going to steal from every transaction, and they can pick and choose how much they make.
http://blog.coinbase.com/post/44046687068/high-risk-transactions
This blog post here is vague and a lie. He cites that it is because ppl try to scam them with fake bank account #s and such. That is such a lie, because you can never scam someone with fake bank account # if the purchase isn't instant. because transaction won't go thru, DUH. Same with fake credit card #s, it WONT GO THRU.
With the whole high risk transaction mechanism, coinbase can literally control exactly how much they can make off of the volatile market. I was one of the people that got hurt REALLY bad. some ppl might even benefit from a canceled order. but the point is, coinbase CONTROLS everything.
I want coinbase to SHOW PROOF that they have been ripped off because people used fake bank account #s. THEY CAN'T. Because you can't get ripped off from a fake account #. You cannot get ripped off if the purchase is not instant.
With the high risk transaction mechanism, Coinbase is GUARANTEED to make money. In a market that is growing, all they have to do is have the system set to flag xx% of transactions, and they are GUARANTEED to make money off this. A LOT of money based on how many transactions they process.
COINBASE, if you are reading this. Please respond and defend your case (i know, your answer would probably be "we can't disclose, blah blah blah.)
Topic: Did I just get defrauded by coinbase? [Ans: most likely yes] (Read 1227 times)
How did you lose $700 from this incident? Or do you mean you "lost" money due to the transaction not being forfilled?
Had the same problem about a month ago. When bought bitcoins price was lower, when received money back to my bank account, I have realised that amount of reived was even less than I have paid. On that moment price for bitcoin was even higher than the price when I bought them.
I think Coinbase is operating like most banks in the world - they just hold Your payments to make trades with it. After they got some profit - they end transaction. Only difference between the bank and Coinbase is that banks does such operations only with international transactions, but Coinbase - via rejected payments.
I think Coinbase is operating like most banks in the world - they just hold Your payments to make trades with it. After they got some profit - they end transaction. Only difference between the bank and Coinbase is that banks does such operations only with international transactions, but Coinbase - via rejected payments.
I bought 10 bitcoins, 4.5, and .4 on Oct 18/19 @ around $150-160. On Oct 24, within almost the hour that the coins were supposed to arrive, I receive the following email for all 3 transactions:
I didn't think it was a big deal after doing a little research since they have squared things away with similar situations, and I've made a 10BTC transaction in the past, but i was a bit worried because of the size of the transactions and the movement of the market. I ask this how could this be fixed?
6 days later, I finally get a response:
Sorry for the confusion on that. It looks like your recent purchases were canceled due to appearing high risk, and a refund has been sent to your bank account.
I know it must be frustrating to have this happen, but it's an unfortunate necessity that we exercise caution when selling bitcoin online in order to protect ourselves and the bitcoin community from fraudulent transactions. While bitcoin transactions from one account to another do not face this kind of cancellation, we can't guarantee the sale of bitcoin to every account due to the high risk nature of selling them online. If you try a purchase at a later time then you may have success getting it to go through. Please don't hesitate to shoot me an email if you have any further questions!
-Rees D. Sloan
Customer Support Specialist
This response really didn't tell me anything. So I ask what my other options are and here is there next response:
Hi _____ ,
I am extremely sorry for the confusion on this. I've taken further steps to review your account and at this point we've been able to get you whitelisted. Any future purchases you make from this point forward will not encounter this cancellation. Unfortunately, since the refund has already been sent out on these original purchases, I'm unable to push through or re-create the original transactions.
Again, I apologize for the frustration this has caused. If you need further assistance please let me know and I'll be happy to help!
-Rees D. Sloan
Customer Support Specialist
Something really just doesn't add up here. At the date and time that the bitcoins were supposed to be added to my account, the price was at like ~199 and 200+ on bitstamp and mtgox. Thats ~$50 increase since the time i bought it, costing me nearly $7-800.
So what did coinbase do with the ~$2500 that was in limbo for so long? And what happened to the bitcoins that was purchased at much cheaper prices?
I mean coinbase could have just denied these transactions right away, and I could have went to another site to buy it right away.
The thing that really hurts about this is that none of this money was mine. I am just a student and I finally convinced family and friends that bitcoin is a worthy investment and they finally trusted me giving me this money to invest. Is there anyway that this could be reconciled?
Quote
On Oct 18, 2013 you purchased 10.00 BTC via bank transfer for $1,556.76.
Unfortunately, we have decided to cancel this order because it appears to be high risk. We do not send out any bitcoins on high risk transactions, and you will receive a refund to your bank account in 3-4 business days.
Please understand that we do this to keep the community safe and avoid fraudulent transactions. Apologies if you are one of the good users who gets caught up in this preventitive measure - we don't get it right 100% of the time, but we need to be cautious when it comes to preventing fraud.
You may have more luck trying again in a few weeks. Best of luck and thank you for trying Coinbase.
Kind regards,
The Coinbase Team
Unfortunately, we have decided to cancel this order because it appears to be high risk. We do not send out any bitcoins on high risk transactions, and you will receive a refund to your bank account in 3-4 business days.
Please understand that we do this to keep the community safe and avoid fraudulent transactions. Apologies if you are one of the good users who gets caught up in this preventitive measure - we don't get it right 100% of the time, but we need to be cautious when it comes to preventing fraud.
You may have more luck trying again in a few weeks. Best of luck and thank you for trying Coinbase.
Kind regards,
The Coinbase Team
I didn't think it was a big deal after doing a little research since they have squared things away with similar situations, and I've made a 10BTC transaction in the past, but i was a bit worried because of the size of the transactions and the movement of the market. I ask this how could this be fixed?
6 days later, I finally get a response:
Quote
Sorry for the confusion on that. It looks like your recent purchases were canceled due to appearing high risk, and a refund has been sent to your bank account.
I know it must be frustrating to have this happen, but it's an unfortunate necessity that we exercise caution when selling bitcoin online in order to protect ourselves and the bitcoin community from fraudulent transactions. While bitcoin transactions from one account to another do not face this kind of cancellation, we can't guarantee the sale of bitcoin to every account due to the high risk nature of selling them online. If you try a purchase at a later time then you may have success getting it to go through. Please don't hesitate to shoot me an email if you have any further questions!
-Rees D. Sloan
Customer Support Specialist
This response really didn't tell me anything. So I ask what my other options are and here is there next response:
Quote
Hi _____ ,
I am extremely sorry for the confusion on this. I've taken further steps to review your account and at this point we've been able to get you whitelisted. Any future purchases you make from this point forward will not encounter this cancellation. Unfortunately, since the refund has already been sent out on these original purchases, I'm unable to push through or re-create the original transactions.
Again, I apologize for the frustration this has caused. If you need further assistance please let me know and I'll be happy to help!
-Rees D. Sloan
Customer Support Specialist
Something really just doesn't add up here. At the date and time that the bitcoins were supposed to be added to my account, the price was at like ~199 and 200+ on bitstamp and mtgox. Thats ~$50 increase since the time i bought it, costing me nearly $7-800.
So what did coinbase do with the ~$2500 that was in limbo for so long? And what happened to the bitcoins that was purchased at much cheaper prices?
I mean coinbase could have just denied these transactions right away, and I could have went to another site to buy it right away.
The thing that really hurts about this is that none of this money was mine. I am just a student and I finally convinced family and friends that bitcoin is a worthy investment and they finally trusted me giving me this money to invest. Is there anyway that this could be reconciled?
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