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Is Coinbase Closing Accounts For Paying Ransoms With Bitcoins? (coindesk.com)
Even as some comparnies are stockpiling bitcoins so they can quickly pay ransom demands, security firms that try paying those ransoms may face losing their accounts on Coinbase. Slashdot reader Mosquito Bites quotes a report from CoinDesk:
Less than a year ago, Vinny Troia, CEO and principal security consultant of Night Lion Security and a certified white hat hacker, was sent a compliance form by US bitcoin exchange Coinbase, where he had an account. Coinbase wanted to know how Troia was using bitcoin and his account. "I told them I run a security firm. I pay for ransoms and buy documents on the dark web when clients request it," Troia told CoinDesk. The ransoms Troia helps his clients pay are those stemming from ransomware attacks, which have surged in number over the past few years. Many, like the well-publicized WannaCry attack, are asking for bitcoin.
And the documents? Troia said, "We do breach investigations a lot of times. If a fraudster is saying they're selling my client's stolen documents, the only way to make sure they have what they say they have is to buy those documents." According to Troia, Coinbase "did not like that at all." Coinbase then asked the IT expert whether he had a letter from the Department of Justice giving him permission to do those things. No, Troia said. Upon further research, Troia has not found that any such permission exists. But, "I have my clients authorizing me to do this," he said. Coinbase sent Troia back an email explaining that those actions were against the exchange's rules and shut down his account... "My entire family is blocked from Coinbase," he said.
And the documents? Troia said, "We do breach investigations a lot of times. If a fraudster is saying they're selling my client's stolen documents, the only way to make sure they have what they say they have is to buy those documents." According to Troia, Coinbase "did not like that at all." Coinbase then asked the IT expert whether he had a letter from the Department of Justice giving him permission to do those things. No, Troia said. Upon further research, Troia has not found that any such permission exists. But, "I have my clients authorizing me to do this," he said. Coinbase sent Troia back an email explaining that those actions were against the exchange's rules and shut down his account... "My entire family is blocked from Coinbase," he said.
Vote with your feet. There are other exchanges.
As discussed here Cyber extortion - legality of ransom payments and the approach of businesses and insurers it shows under international law, cyber extortion payments arent illegal unless they are terrorism related.
I dont believe Coinbase should be denying access to legitimate funds, that arent terrorism related, unless they want to get regulated... this would be the first step to ruining their little monopoly.
It's not a typo if you understood the meaning!
There are, AFAIK, only two exchanges that 1) mind your privacy, 2) are out of reach of U.S. gov, and 3) comply with regulations for financial institutes, and that's Paymium and Bitstamp in the EU.
Use Coinbase and you risk losing your Bitcoin and your personal detaisl to the U.S. gov.
> The real motive by Coinbase is probably a fear that they'll be accused of helping facilitate criminal activity. Bitcoin exchanges are on the narrow edge of falling under regulation,
I suspect that, since many exchanges do facilitate quasi-legal and illegal activity, it's important in business terms for them to avoid any involvement in clearly illegal activity that has the kind of paper trail or provenance that a security firm such as Control Risk might provide. An exchange for an illegal activity, such as laundering money paid for extortion, would seem to make a company ripe for examination by the FCC, the IRS, the FBI for participating in extortion, and the CIA for exchanging in wire fraud helping conceal the identity of the extortionists, and the UN Financial Action Task Force