Coinbase is one of the number one crypto wallets out there and is extremely popular with the numerous cryptocurrency exchanges out there. There is a good reason for this, and that is Coinbase has managed to integrate its fiat currency services into 32 countries (at present) and boasts 12 million users globally. On top of this, users from over 190 countries can register an account at Coinbase. This begs the question as to why crypto gamblers have been avoiding the San Francisco based entity’s service.
With online casinos now widely accepting cryptocurrencies that are compatible with Coinbase, the esteemed crypto wallet appears to be the most obvious and easiest option to fund online casino play using digital currencies. Bitcoin, Litecoin and Ethereum being the most popular cryptos to gamble online with; all of which are readily available at Coinbase.
However, most online cryptocurrency gamblers that are taking the Coinbase route into crypto gambling don’t realize that they are in fact walking into a self-inflicted trap.
Now although it may seem like Coinbase are being arrogant or unfair, it is not actually the company’s fault. All the owners are doing are protecting their own best interests and trying to act within the realms of the laws in the country they operate out of. Therefore, you should put aside the bad press given to Coinbase on this subject.
To put an end to the drama, we have investigated the “Coinbase versus Cryptocurrency Gambler” controversy.
What we have found is that the fault lies somewhere between Coinbase not making it clearly obvious that they will suspend accounts associated with online gambling and those that want to gamble online using crypto not reading Coinbase’s terms and conditions.
For the most part, it is the later of the two that is more at fault, which means those making the mistake of thinking they can use Coinbase for crypto gambling and not researching their options properly. After all, there are plenty of warning signs out there stating that a gambler should avoid Coinbase.
Here are 3 reasons why you should not use Coinbase for online gambling:
You can imagine how many people are attracted to Coinbase. The company name is everywhere. Therefore, it hardly comes as a surprise to hear that many online gamblers see Coinbase as their ticket into online gambling via crypto. The problem is Coinbase’s terms and conditions forbid the use of their crypto wallet for online gambling. The inevitable result is account suspension.
In the past, this was a huge issue as Coinbase made it difficult to retrieve funds but has since streamlined the process of retrieving funds from a suspended account much easier these days, but all this causes more palaver than it is worth.
Plus, any thoughts of appealing an account suspension will also be crushed. Coinbase offers no appeal service and their customer service team will not help. Your Coinbase account will effectively be useless.
Try to remember that Coinbase is a US-based business. Now, an important point here is that online gambling in most US states is not illegal. In fact, the rules that have managed to restrict online gambling in the US are financial laws that are enforced by the Financial Crimes Enforcement Network (FinCEN).
These laws forbid US-based financial institutions to process monetary transactions related to any online gambling activities in most states across the US.
On the other hand, funding online gambling using a financial source from outside of the USA is not illegal. For many, this has meant turning to cryptocurrencies because there are plenty of ways to transfer funds from the US to an offshore crypto wallet. From an offshore crypto wallet, it is easy to transfer funds into any cryptocurrency based online casino as long as it is based outside of the US.
Now going back to Coinbase and the fact that the company is based in San Francisco, a place where FinCen laws still apply, you can imagine the conundrum that this causes for Coinbase should they allow US citizens to use their crypto wallet to fund online gambling of any form.
This does not only apply to those using Coinbase in the US. Coinbase also needs to make sure that as the company is US based, that it has nothing to do with online gambling whatsoever even on a global basis.
Now you can hardly blame Coinbase for suspending people’s accounts associated with online gambling.
Many US-based online gamblers using crypto are avoiding Coinbase because of rumours that the company is breaching the privacy afforded to them by using the blockchain.
It is certainly no secret that Coinbase tracks user account behaviour because people’s accounts are being suspended. However, it is said that Coinbase is taking account monitoring one step further by sending user account information to FinCEN, who in turn can track what people are doing with their cryptocurrency. This could very well be true, but there is currently no concrete evidence.
There is clearly no doubt that there is plenty of news out there that claims this is happening, but we all know the media can create a mountain out of a molehill.
Coinbase certainly has not made an announcement to say that this is what the company is doing. If Coinbase is doing this, then for sure, this is a huge breach of trust between company and users. The idea of the blockchain is privacy and anonymity – a way of putting the power back into the hands of the people and breaking the chain of government rule.
For now, all we can say with certainty is that one thing is clear; Coinbase is banning/suspending accounts directly associated with Bitcoin/crypto gambling. And, there are perfectly valid reasons for Coinbase doing so too as stated in part 2 above – legal reasons. The rumor that Coinbase is reporting account information to FinCEN may have come from this. On the other hand, the notion that FinCEN has ordered Coinbase to do this is not out of the question.
Weighing up the evidence, the clues are right in front of us. If you want to gamble online using cryptocurrency, you should avoid Coinbase and any other crypto wallet that is based within the USA. There are some risks involved with storing your cryto overseas as you are not protected by US consumer rights laws, but if you want to gamble online, this is the safest course of action.
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