[Complaint/Warning] CoinBase apparently sent the cops to someone's house for sending BTC to a DNM...

https://www.reddit.com/r/Bitcoin/comments/34yvtf/coinbase_is_behaving_like_big_brothermonitoring/

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Coinbase IS behaving like Big Brother/Monitoring (self.Bitcoin)

submitted 3 hours ago by throwawayshowaway1

Thats it. I thought these complaints/rants against Coinbase were explainable in one way or the other. But no, sorry. Coinbase is seriously crossing the line now. I have had an account with Coinbase for well over 1.5 year. I bought some btc in March, and sent it to a DNM (won't say which one).. and did not purchase anything. I did not. The btc was a trivial amount, and said DNM has been having troubles with their uptime lately. Literally, no crime committed.

Fast fwd to yesterday. I wasn't home yet from work, but my wife tells me local LE showed up and wanted to have a "chat". Asked if I or anone had ever ordered anything illicit in the mail. Said "nobody's in trouble, we're just following up on something that might be nothing". My wife, bless her heart, answered truthfully "no". She should have told them to GTFO off our porch.

1) I have never ordered any illegal substance to my home address - so I know this "knock and talk" was ridiculous.

2) I bought bitcoin from Coinbase and sent it to a DNM. That's it. Is that a crime? Is that enough for Coinbase to apparently "report" me? It's ludicrous! Coinbase never even sent me an email or anything of the sort.. it looks like it straight up tattled. The irony is, I never committed anything remotely illegal.

TL;DR - Coinbase is monitoring everything you do and fast becoming the teachers pet and trying to score points with govt/banks/LE/regulators etc, even if it means just tattling on anyone who even does anything remotely naughty with btc.

Fuck Coinbase. Cancelling my account today.

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So uhhh... guess Helix by grams is gonna be doing some better business now, eh?

I've said it before and I'll say it again... store your own BTC immediately after (or at) purchase - use Electrum on Tails.

EDIT: Actually, there could be even more to this story, check out this comment:

https://www.reddit.com/r/Bitcoin/comments/34yvtf/coinbase_is_behaving_like_big_brothermonitoring/cqze0ly?context=2

This brings up an interesting possibility... that LE got involved not via CoinBase, but via the market itself, which is definitely plausible. If the market was compromised, or if the pseudorandom number generator that churns out its deposit addresses was exposed or cracked, LE would then look for BTC addresses that sent coins there, and where they could assign a source to any of those (like CoinBase), they might then send a subpoena for that user's info. This actually lines up a bit better, too, in regards to what the CoinBase employees in that thread are saying - that CoinBase wouldn't send the cops, just close the account.

Hmmmm....

Agora's still having troubles with their deposits, right?


Comments


[24 Points] eewqoryowpr:

I would caution reading too deeply here. The OP made a mistake by not tumbling but it sounds like other incriminating facts are being omitted. I mean seriously I don't mean to assume guilt but doesn't it seem weird for him to send bitcoins to a market for no reason. It seems more likely OP used a drop for his purchase so the drugs didn't actually come to his residence.

Notice he says, "I've never ordered drugs to my home address."

Seems more probable he shipped to a friend who rolled on him or package was profiled and delivered to a po box.

This all sounds like an excuse to me saying he just innocently sent coins to a dnm. We honestly can't know what other illegal things that could have led LE to knock on his door.

LE investigating sending bitcoins to a dnm seems way down there list of priorities and why would they not go after a bigger fish. I would assume there are much larger buyers of bitcoin that don't tumble. Stupid idea but we all know how people don't even encrypt their addresses.


[15 Points] shoelace120:

There have been reports of Coinbase also canceling transactions of people who had sent previously untumbled btc to various DNMs. People who were fully verified on Coinbase. Couple that with the recent report of someone getting their account restricted by donating to Gwern and it's pretty clear Coinbase is monitoring what btc addresses coins go to.


[10 Points] rappercake:

Circle does the same thing. I got this message just a few days ago, but have transacted hundreds of dollars of BTC through circle since then.

"Hi there, Unfortunately we have noticed unusual activity on your account and we will not be able to offer you service at this time. This activity relates to sections 16 and 17 of the User Agreement which detail 'Restricted Activities." Please reference the User Agreement should you have any further questions. Per Section 6 of the User Agreement, the bitcoin remaining in your account can be withdrawn to an external bitcoin address before it is closed. Please withdraw your bitcoins by (2 weeks from date of this notification), after which they will be inaccessible without contacting customer support. Best, Team Circle"


[7 Points] d4nk1st:

i tried to tell everyone coinbase monitors accounts for DNM activity and reports them to LE a few of their employees have even confirmed this in the past however nobody believed/listened. guess now they should feel like idiots for not doing so


[9 Points] myDNMburner:

You guys are all glossing over a post in that thread that is....interesting. A coinbase rep admits that he is on reddit daily (would explain how they found Gwerns BTC addy he only posted here once) and that they're looking into anybody who donates to Gwern's previous activities. This is fucked.

"Some users who donated to him drew our attention to the fact that they were also using Coinbase for other things which are against our ToS."

https://www.reddit.com/r/Bitcoin/comments/34yvtf/coinbase_is_behaving_like_big_brothermonitoring/cqzmqxo


[9 Points] TotesMessenger:

This thread has been linked to from another place on reddit.

If you follow any of the above links, respect the rules of reddit and don't vote. (Info / Contact)


[7 Points] NashHarvey:

how do they know which wallet addresses are associated with dnm?


[3 Points] __Grammar__Nazi__:

No really thats my only available comment- Fuck you Coinbase.


[5 Points] BahWhatever666:

Dude prolly just told someone he buys drugs online then pissed someone off and they ratted him out to the police. Simple and a lot more probable.


[5 Points] BahWhatever666:

Another more plausible story: Wife is pissed off that her husband is having drugs sent to their house and makes up bullshit story to scare him.


[4 Points] bubbadonutcop:

Its not hard to do some basic mixing so you dont raise coinbase flags.

coin base > offline wallet > shape shift > blockchain > DNM

OR whatever order and wallets you wish to use.


[5 Points] throwawayshowaway1:

Can confirm. It was definitely, absolutely Coinbase. I obscured a few details of my situation, but the only plausible link to my identify in this fiasco was Coinbase. Never once had I ever ordered anything to my home address. Coinbase is a bitch. And I don't care about not tumbling.. I'm not going to get into specifics, but the fact of the matter is that in this instance Coinbase is going out of there way to be suck LE nuts.


[3 Points] eatmybreadpudding:

Maybe I'm not understanding that other comment, but how would LE find this person's address without triggering Coinbase to close the account? Wouldn't they have to go through Coinbase to get it, therefore alerting them of possible criminal activity?

EDIT: Posted this directly in the comment's thread, so feel free to continue the conversation there.


[3 Points] BahWhatever666:

"If the market was compromised, or if the pseudorandom number generator that churns out its deposit addresses was exposed or cracked, LE would then look for BTC addresses that sent coins there, and where they could assign a source to any of those (like CoinBase), they might then send a subpoena for that user's info. This actually lines up a bit better, too, in regards to what the CoinBase employees in that thread are saying - that CoinBase wouldn't send the cops, just close the account."

So after infiltrating the market, cracking some hard cryptography, then tracking the (supposedly small) bitcoin transaction and grabbing his personal info from CoinBase (who then doesn't cancel his account) they send a couple local cops (not federal agents mind you!) to some dudes house to talk, then leave and he goes about his business? This lines up how?

Sorry, but that is a VERY hard pill to swallow. I think they have bigger fish to fry if they have infiltrated a market that has millions of BTC and massive quantities of drugs going through it.


[3 Points] Zerocola:

I can literally FEEL the teenage angst coming out of this post


[3 Points] None:

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<3 for sapiophile

I'd like to know what town is small enough to justify local cops even responding to a call about 100$ in magic internet money. I live in a major city and I'm quite sure the police around here would quickly hang up the phone if they got such a call.


[2 Points] None:

That is illegal though... Aiding and abetting a criminal enterprise...


[2 Points] OnAcidButUrThedum1:

What I have had trouble understanding is why not just send the coins from Coinbase to an offline wallet such as Electrum? Get your coins then send them to a tumbler/market.

Pretty simple.


[2 Points] dreamingawake09:

So glad LibertyX is available in my city. Don't have to deal with any of that bullshit, and I recommend folks in the US to check and see if you have it available. I prefer it over LBC, its quick, its painless and you don't deal with bullshit like this from centralized business like Coinbase or Circle.


[2 Points] focksnews:

smh....there's tons of posts about coinbase doing that to users. They monitor any coins sent to dnm's and have been known to cancel accounts for it. He should've known better


[2 Points] None:

Technically you may have committed a crime by sending your coins to DNM - conspiracy to purchase illegal drugs. All that requires is an agreement to commit a crime between two or more people. It could be argued that you signing up with a DNM constituted that agreement if they can prove that's what you intended to do (based on prior purchases etc...). I don't know if there's any case law about whether a DNM is a "person", but my guess is that it is. ("Person" is read very broadly - see the Hobby Lobby case).

That said, I'm sure this was just a knock and talk to try to get you to elicit incriminating evidence.

Even though I think a very broad reading of Title 18 may classify this as a crime, no prosecutor would ever bring such a case.

Never forget how truly broad federal drug and conspiracy laws are!


[2 Points] Theeconomist1:

So wouldn't it be just as plausible that LE is actually the ones monitoring Gwern's BTC account and where they see coin from a Coinbase wallet, they notify Coinbase? It could be either way I guess.

Now, the Gwern thing is surprising b/c he isn't a DNM and doesn't do anything illegal. But overall, we all knew that given that Coinbase is a legit company raising money, they arne't going to be participating in activity that will get them in trouble. They are going to try to attempt a spotless reputation. Especially for accounts that don't account for much revenue or to their bottom line - that's a no brainer. It was like the quote from the company that made Qualludes (their name eludes me at the moment) - when they stopped making it, the CEO said that "Qualluades accounted for 2% of our revenue and 98% of our headaches."

No matter what, if you plan on using Coinbase for DNM activitiy, use an intermediate wallet or two. Don't send to a tumbler as I figure those addys, if ever uncovered, will lead to the same problems.


[2 Points] Vendor_BBMC:

I can't see the police mentioning coinbase or even bitcoin anywhere in the account.

How would coinbase know that a particular wallet address is an agora wallet address? When you deposit bitcoin in agora, it just goes into a tumbler and your account is credited with virtual bitcoins. Most of these virtual bitcoins (which don't show on the blockchain - they're just numbers) end up in the agora accounts of vendors. Its only when a vendor makes a withdrawal that any real bitcoins move anywhere.

Coinbase are looking for bitcoins coming FROM darknet markets to be sold, if anything. THAT's what they report to the police.

Drug BUYERS aren't targeted, they only think they are because they're also drug TAKERS. The police can only get a search warrant for DRUGS.


[2 Points] None:

from that thread:

[–]CoinbaseAdrian 29 points 16 hours ago Yes, I'm well aware of it (I read reddit most days). Donating to gwern is not illegal nor against our ToS. Some users who donated to him drew our attention to the fact that they were also using Coinbase for other things which are against our ToS. I apologize if my answers came off as evasive, I'm answering as best I can. It would definitely be easier to just ignore threads like this, but I respond because I care about our customers.


[1 Points] None:

[deleted]


[1 Points] Idg0d:

I said this before use btcchina china controlled company no monitoring from your "big Brother" friends


[1 Points] None:

another FUD post with the phrase "Knock and Talk"


[0 Points] BahWhatever666:

Wow. You guys do WAY too any fucking drugs!