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Sent $35,104.11 USD to CoinBase. Never received Bitcoins

news.ycombinator.com

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Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#431

Post by gaadd33 »

sheetjs wrote: post #394
cehlen wrote: post #323

Earlier quoted context omitted.

Take it EASY everyone! They made a mistake, took responsibility for the error, resolved the issue, and compensated the user for his inconvenience. Good for them!

For posterity's sake, here are the sequence of events. Coinbase: 1) stopped replying to support emails even though there was a clear issue 2) only addressed the issue when the victim decided to submit his issue to HN (and only after it sat on the front page for nearly an hour 3) blamed a server upgrade and offered $50 of BTC when the actual loss was well north of $12K 4) only made the customer whole after many HN com…

How did you conclude the actual loss was > $12K? He got the bitcoins at today's price + $50. That seems like there was no loss?

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#432

Post by gaadd33 »

tga wrote: post #48

For anyone considering using Coinbase or similar services where you have to pay via bank transfer -- think twice and take this as a serious warning that you have almost no protection if they screw you/up somehow. I have a problem with Coinbase for a much smaller sum (luckily): ordered at what I was convinced was a fixed price and just received less BTC at a much higher rate. Their customer support refuses to help (or…

Why can't you file a small claims lawsuit? It should cost you about $50 and a few hours of your time.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#433

Post by sheetjs »

gaadd33 wrote: post #431
sheetjs wrote: post #394

Earlier quoted context omitted.

For posterity's sake, here are the sequence of events. Coinbase: 1) stopped replying to support emails even though there was a clear issue 2) only addressed the issue when the victim decided to submit his issue to HN (and only after it sat on the front page for nearly an hour 3) blamed a server upgrade and offered $50 of BTC when the actual loss was well north of $12K 4) only made the customer whole after many HN com…

How did you conclude the actual loss was > $12K? He got the bitcoins at today's price + $50. That seems like there was no loss?

>He got the bitcoins at today's price + $50

That part only happened after many people criticized the original response: (https://news.ycombinator.com/item?id=6930109)

> Edit: your bitcoin credit has now been processed. It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. We should have certainly caught it and responded sooner so that was our fault. My deepest apologies for the delay and trouble on that. We've credited $50 worth of bitcoin to your account for the trouble, as a small way of saying thank you for bearing with us.

This was understood to mean that Coinbase would honor the original price (868.91) and not the current price. The general impression was that Coinbase made the purchase at the current price (roughly 550) and is honoring the other price (868.91), which would mean that OP lost about (868.91-550)*40 = 12756.40 (and Coinbase would be pocketing the difference).

People correctly noted that Coinbase's move was entirely inappropriate, and they were forced to change course (note the "Edit2"):

> Edit2: we'll push through the bitcoin credit at today's price instead of the original buy price (which should be in your favor) since the mistake was on our part.

The general policy with most financial firms is that firm errors should be resolved in a way that benefits the customer (so in this case, if BTC actually increased in price, Coinbase should honor the original trade price)

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#434

Post by dschiptsov »

slg wrote: post #217
seldo wrote: post #185

Earlier quoted context omitted.

Forget the difference in the exchange rates. Are you saying you have no system in place to monitor if transactions execute successfully ? I'm not trying to be hyperbolic but that's really shocking for a company that is trying to play a role as a financial institution.

>that's really shocking for a company that is trying to play a role as a financial institution. That is probably the scariest part about the current Bitcoin community. Many of the big names are simply "playing a role". We have no idea of their technical expertise, the viability of their software, their USD/Bitcoin reserves, how they plan to address disputes like this, or even whether they are skimming of the top.

> We have no idea of their technical expertise

why, we do - a team who could quickly build a rails app and connect it to third party payment processor.)

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#435

Post by nikatwork »

seldo wrote: post #225
slg wrote: post #217

Earlier quoted context omitted.

>that's really shocking for a company that is trying to play a role as a financial institution. That is probably the scariest part about the current Bitcoin community. Many of the big names are simply "playing a role". We have no idea of their technical expertise, the viability of their software, their USD/Bitcoin reserves, how they plan to address disputes like this, or even whether they are skimming of the top.

I mean, MtGox stands for "Magic The Gathering Online Exchange". They were literally set up to sell trading cards. The whole "being the biggest bank in a new $6bn+ economy" is a pivot. The whole system is crazy. But even by those standards, taking 35 grand and not noticing you didn't give them what they paid for stands out.

Aww, you guys are so cute. You think banks have this stuff under control? Auditors will "find" hundreds of millions of dollars of missing assets on the regs.

Many banks are powered by duct tape and loose Excel spreadsheets. That's why things like Basel exist.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#436

Post by [deleted] »

glcbitcoin wrote: post #420
quack wrote: post #227

Earlier quoted context omitted.

No. The joke is that people are demanding a product so badly that theyre doing business with kiddies who dont know how to run a financial institution. This is literally an economy of "shut up and take my money," but no one wants to play ball.

Wait! One of the founders was a currency trader at GS?! Doesn't that make them trustworthy?

[deleted]

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#437

Post by bushido »

blantonl wrote: post #422
bushido wrote: post #272

Earlier quoted context omitted.

It does not need to be licensed as a financial institution to be deemed as one. The courts can and will deem them that the company is subject to some of the rules and regulations governing the financial industry and up the charges against them when this enforced. I am purposely not saying 'if'. Because there is no possibility of this not being brought to a judge on the behest of SEC themselves or a consumer complaint…

Bitcoin is not an official currency in the eyes of the law. Therefore, there are almost zero regulations that would apply to Bitcoin transactions, other than contract law.

You are right, botcoin is not a currency, but it is a security and it is traded on an exchange.

Here's the definition of a security [Securities Act of 1933, Section 2(a)(1)]: The term “security” means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#438

Post by gigq »

makomk wrote: post #359
joezydeco wrote: post #282

Earlier quoted context omitted.

I've been keeping my mouth shut here about Coinbase after starting that thread 9 months ago. I feel bad for someone that can't put a finger on his 30K, but I can't feel that bad if he didn't do a little research here first. Hopefully on the next bubble people will be a little more enlightened.

If you're to believe the press they've received, Coinbase are basically the most reputable and trustworthy company in Bitcoin and the one that's going to bring it into the mainstream.

If you've dealt with any of the bitcoin exchanges you'd realize Coinbase is the most reputable and trustworthy. It's either deal with them, trust Magic the Gathering Online Xchange or the Russian mobsters over at btc-e.com. Seriously this is a sector that is in desperate need of more legitimate players but so for this is the best we have.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#439

Post by rayiner »

gaadd33 wrote: post #429
PeterisP wrote: post #409

Earlier quoted context omitted.

If this is really is business as usual, then it might be acceptable for a widget selling company but completely unacceptable for financial services. In financial services the same actions that you describe are gross negligence that (depending on jurisdiction) can mean personal liability, possibly including criminal charges, for the relevant CxOs, and a lifetime ban from running any other financial companies in future…

You think that Goldman Sachs, for example, had exactly 263,674,000,000.00 of cash and cash equivalents at the end of 2012? You don't think that's likely rounded to at least the million? In fact it seems that most Fortune 500 companies, regardless of industry round things to the million. It's pretty easy to lose a few hundred thousand if you are doing that.

Auditing standards at large banks have a materiality threshold. At a Goldman or Morgan Stanley, that threshold approaches half a billion. But that's at the top layer, on top of many other layers of accounting. At the level of individual customer accounts, even small discrepancies would be caught.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#440

Post by cmsmith »

barmstrong wrote: post #53

Brian from Coinbase here. Sorry for the delay on that - definitely not the customer experience we are striving for. We should have things squared away for you by end of day. Edit: your bitcoin credit has now been processed. It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. We should have certainly caught it and responded sooner so that was our fault. My deepest apol…

>Edit2: we'll push through the bitcoin credit at today's price instead of the original buy price (which should be in your favor) since the mistake was on our part. Sorry again for the trouble!

Is this an actual policy of Coinbase, or restricted to times when you get bad press?

Because when I saw this post I could swear that it was about me. I gave you $467 about 24 hours after the OP for 0.5 BTC, with the promise that I would have the coins 5 days later (when they were still worth $450 or so). See this screenshot from earlier today

http://imgur.com/4WrTDPy

Since I took that screenshot 8 hours ago, the coins have been credited to my account (finally) and are worth about half what I paid for them.

Now my problem was a couple orders of magnitude smaller than that of the OP here, which is why it hasn't been worth my time to send a lot of emails about it or post on HN (and the market looked OK until 24 hours ago). I had chalked it up to the risk of performing financial transactions in an unregulated marketplace.

But I feel compelled to provide another example given your assertion that this only occurred with a 'handful' of orders.

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