Beware of Coinbase. They Reversed My BTC Sale

86 points by abijlani 12 years ago | 25 comments

I sold 5 BTC on December 6th: http://d.pr/i/n9Zc

Couple of days later the BTC showed up again in my account saying they needed to "offset" my transaction which makes no sense because I originally purchased the BTC using Coinbase. I let it be. On December 13th I got a notice saying that the sale had finally completed and so I waited hoping any day my bank account would be credited with $4,118.94.

Instead of the money, they added a transaction to my account saying that I had "Purchased" 5 Bitcoins which I never did. So now instead of having sold 5 BTC at $832. I'm holding 5 BTC at a much lower price which I never wanted. How convenient Coinbase. You obviously benefited from my sale because you sold my coins to someone. And now you conveniently added it back into my account since the price is lower.

The worst part of all this is that I have opened support tickets, tweeted at them, wrote an email directly to the CEO Brian Armstrong. And there is nothing but silence. I even wrote a blog post: amit.roon.io/an-open-letter-to-coinbase

Things can go wrong in a fast growing startup but ignoring customers is the worst thing you can do.

bushido 12 years ago |

I will refrain from calling out coinbase for their alleged improper management and execution of transactions(alleged by me in great details in the previous threads) due to retracting a couple of my comments (on my own behest) due to drawing conclusions based on misunderstanding a reply to one of my posts. I have decided to subdue my biases against CoinBase practices for a few days for health reasons.

But, some of the issues that were highlighted may be prevalent here, as they do seem to behave like an exchange (even though they are allegedly not one even though they fit the definition).

Before someone points this out, its true that bitcoin is not recognized as a currency in the US, but it is considered a security by SECs definition of what a security is.

By CoinBase's definition they buy and subsequently sell or buy-back BTC like an ecommerce product. Wonder why an e-commerce product previously sold by them would be "offset" or reversed due to potentially fraudulent activity?

Also, it can be alleged that the OP is not being completely forthright about the full story? I don't believe that the OP is hiding anything.

If the OP did send and receive BTC thus technically having different BTC than the ones CoinBase sold to the OP is there any reason that all incoming BTC transactions cannot be classified as fraudulent?

I will not personally answer any of these questions even though I want to.

The previous threads are at: [0] https://news.ycombinator.com/item?id=6929705 [1] https://news.ycombinator.com/item?id=6933360

edit: spelling and grammar

bcl 12 years ago |

Time to stop these posts. This isn't coinbase support and it isn't a forum to air your problems.

AnotherDesigner 12 years ago | |

I'm glad all of these threads happened. Now I know that Coinbase isn't a reputable company and I should never trust them with my money.

All of these posts show the truth, even when YC posts things like this:

http://blog.ycombinator.com/coinbase-yc-s12-is-becoming-the-...

crcastle 12 years ago | | |

I've been more than pleased with the service Coinbase provides. I have been a customer for almost three months and have bought and sold several thousand USD worth of BTC in that time.

How do you know these posts show the truth? What if these poor experiences we see posted on Hacker News are occurring at a rate of 1 in every 1000 Coinbase transactions or even 1 in 10,000 transactions? I agree that with money the error rate should be low, but BTC is the wild west.

You're taking on risk wherever you buy and sell BTC these day. As a US citizen, I'd rather take a little bit of risk with Coinbase, a US-based company supported by reputable US-based VCs, than take on the risk of sending my money to Slovenia or Japan -- not to mention the extra fees to do international wire transfers to/from those countries.

bcl 12 years ago | | |

You cannot really believe that a few posts on HN, whether they are positive or negative, really are a good indicator of Coinbase's reputation, can you? Anyone can post anything and the more negative it looks the more people upvote it. Upvotes do not correlate to truth or accuracy.

For example if I were to post that I have used Coinbase multiple times with no problems I wouldn't expect to see a single upvote. It isn't news.

manicbovine 12 years ago | | |

Hacker News would be better off with a long-form blogpost about the business and technical aspects of this purported problem with Coinbase.

rajacombinator 12 years ago | | |

I also appreciate the posts.

lfuller 12 years ago | |

These aren't simply customer quibbles, Coinbase is literally causing customers to lose thousands of dollars of their own money. They clearly are an untrustworthy company, and people should be informed - especially when there are large sums of money on the line.

mazarian 12 years ago | |

I'm also glad people are posting about Coinbase. Thankfully I've only entrusted them with 1 BTC...but I will surely not be using them for anything else.

cheshire137 12 years ago | |

I'm glad to see these posts. Well, I'm not glad these things are happening to Coinbase customers, but if they are, I'm glad reports are showing up here.

PhantomGremlin 12 years ago |

You only need to know two things about BTC. Both courtesy of @ReformedBroker (but origin may of course be elsewhere).

Don't get me wrong, I really really really wish that a practical and honest and low-friction anonymous virtual currency existed. It doesn't currently. Bitcoin isn't it.

1) "You know what's cooler than a million dollars? Virtual currency backed by nothing and nobody."

2) The second explains BTC using a Venn diagram. If you don't understand this diagram, you're the ideal BTC user. http://www.thereformedbroker.com/2013/11/20/bitcoin-likely-u...

staunch 12 years ago |

They probably reversed it because they (wrongly) suspected fraud. I'm sure it's well within their Terms of Service.

You're the one gambling money on an unproven digital currency, created by an anonymous person on the internet, via an unproven and completely overwhelmed little startup. If you can't handle losing money on a failed transaction then don't play the game.

berberous 12 years ago | |

Maybe I'm misinterpreting your tone, but you sound overly defensive of CoinBase and dismissive of the OP. He's not crying over his losses, but warning others about the terrible customer service he has received. And I for one appreciate these warnings.

You're right that the people gambling on BTC are playing a risky game, and maybe they should expect events like this. Likewise, however, a startup flush with tons of capital that can't be bothered to even reply to its customers' support tickets shouldn't complain when people warn others away from them. (Although r/bitcoin is probably a better forum than Hacker News).

Regardless of their TOS, they know full-well that customers use their platform to speculate. If they can't handle high-value financial transactions properly, or at least respond to their customers when things go wrong, then they shouldn't play the game either.

abijlani 12 years ago | |

It wasn't a failed a transaction. They never said the transaction failed. I got a confirmation that the sale was completed.

staunch 12 years ago | | |

It's failed if Coinbase suspected fraud and it's reversed.

lafar6502 12 years ago |

Heh, they're not exactly _IGNORING_ customers. They're using them as milking cows.