Coinbase Shutting Down Accounts Transferring to Gambling Sites

coinbase bans gamblingThe title says it all!  Coinbase has been shutting down US accounts that are transferring bitcoins directly from bitcoin wallets to gambling sites.

Honestly this is not a big deal, because you should not be using coinbase as a wallet.  That is how all the Mt Gox customers got screwed and lost everything they had in their mt gox wallets.

The problem: Some of us are lazy (or don’t know any better).  They buy bitcoins at coinbase and then send it to betting sites.

The Simple Safe and Better Solution: Use an offline wallet – desktop or mobile.

  • DesktopMultibit is a fast and easy to use wallet that is the best solution for most bitcoin users.
  • MobileBitcoin Wallet seems to be the favorite
  • BothGreen Address seems to be the best wallet that has both a desktop version and a mobile wallet

Here’s the steps to get around this:

  1. Buy bitcoins from coinbase
  2. transfer them to your offline wallet (like multibit or bitcoin wallet)
  3. then send the money wherever you want (like gambling sites) freely without any restrictions.

This is the letter being sent to users who transfer directly from their coinbase wallet to gambling sites:

Upon review of your Coinbase account, we have determined that we can no longer provide you access to Coinbase Services. Please understand that Coinbase is a regulated Money Service Business under the FinCEN division of the U.S. Treasury Department and as such, we are required to review accounts in order to ensure compliance with regulations.

Gambling is illegal under US law even if you live outside of the US we cannot provide services to your account for the purpose of any type of gambling activity.

Please note that we have not blocked access to the bitcoin balance currently in your Coinbase account; while we can no longer process transactions of this bitcoin via our banking relationship, you may send this bitcoin to a local wallet or another bitcoin address.

In the event that your controls change and you are able to prevent such activity from occurring on your platform please let us know and we’d be happy to review your compliance program and evaluate your account to see if we can support it in the future.

This is being reported at bitcointalk and of course reddit.   It’s pretty obvious Coinbase want to stay in business in the US without pissing off the DOJ.  The problem is that it is none of their business where you are sending your bitcoins.  Just send the money from your coinbase account to an offline wallet.  You wouldn’t want your bitcoins on their anyway, in case they do shut down or get hacked or pull a MT Gox.

Kevin Green

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I find the whole cryptocurrency process very intriguing at this stage and how it will become more popular as the cryptocurrencies mature and become safer.

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