Coinbase’s philosophy on account removal and content moderation

https://blog.coinbase.com/coinbases-philosophy-on-account-removal-and-content-moderation-c80d1aa452b7

by jbegley • 4 years ago

95 101 4 years ago

blog.coinbase.com

throwaway22032• 4 years ago

My wallet's philosophy on account removal and content moderation:

spamizbad• 4 years ago

Sounds like they aren’t willing to go to bat for you if one of their “partners” (not just AppStore and payment processors, but also cloud service providers) pressure them. Very easy out to censor anything.

MrStonedOne• 4 years ago

They said they disable that content or that user, in relation to that partner, so it seems like if they get told by apple that your nft violate ios guidelines, you may find your nfts stop showing up on the ios app when searching.

I don't see how they have any other choice, and only having the walled garden effect the walled garden is more than a lot of other platforms are willing to do.

cypherpunks01• 4 years ago

It seems the real philosophical meat (or tofu, for vegetarians) behind this post is in the linked article:

"Section 230: Mend It, Don’t End It" https://medium.com/craft-ventures/section-230-mend-it-dont-e...

Which calls for corrections to the "liability shield" for platforms that host user-generated content, such that they remain shielded if they limit user-generated speech in line with First Amendment principles. The pitch is that 1A principles are more uniform and well-understood, as compared with each companies' own views on what constitutes "objectionable content".

pavlov• 4 years ago

The American constitution is a vaguely worded 18th century document whose interpretation depends entirely on the whims of nine political appointees.

A liability shield isn’t much of a shield if every content moderation decision is potential liability under the extremely murky standard of American constitutionality.

ramesh312• 4 years ago

The American constitution is a vaguely worded 18th century document whose interpretation depends entirely on the whims of nine political appointees.

Feature, not a bug. The concept of living law is one of the most important contributions of english common law to humanity.

sk5t2• 4 years ago

Spot on, the history of horrible decisions (Dred Scott, Kelo v New London, Citizens United, Wickard v Filburn) the weight of some of which still burdens us should be evidence enough of a dangerously broken system. One need not even wander into the impossibly cloudy question of what "shall not be infringed" means.

closeparen• 4 years ago

This would preclude HN, which is moderated on much stricter than first amendment grounds.

TulliusCicero• 4 years ago

Virtually everywhere is moderated more strictly because in most contexts to do otherwise is silly or even insane.

E.g. pretty much any communication medium will (try to) ban spammers, even if 'spamming' is legal.

schoen• 4 years ago

I'm not sure how Brian Armstrong chose those particular five articles to link to at the end of this post, but I don't think that Coinbase meant to say that those articles reflect its own preferred position on speech or intermediary liability, as all five take somewhat different positions, which may even conflict with each other. So I don't think this is a subtle way of revealing Coinbase's new position on §230 reform or something.

I suspect it's a bit more like "hey, in case you haven't noticed, intermediaries' role is a pretty hot debate lately, as indicated by this range of views about it".

(Thanks for the tofu!)

ramesh312• 4 years ago

Discover all the joys of centralized banking, but with none of the pesky regulatory oversight or possibility of legal recourse!

arcticbull• 4 years ago

The future is now.

RedXIII• 4 years ago

or overdraft fees

worstestes2• 4 years ago

Just with more daily hacks

spicybright• 4 years ago

I'll take overdraft fees in exchange for secure money storage.

emersonrsantos• 4 years ago

They could have a philosophy of serving their customers.

If you are an international customer you have ZERO support despite being able to sign up, make transfers and trading.

I don't recommend Coinbase to anyone outside the US.

kingcharles4• 4 years ago

I just had my bank account terminated by Block (Square) because it was easier to boot their customer than deal with my support request which was outside of their pre-written script.

Their ToS of course allows them to terminate an account at any time for no reason. Their support staff keep saying that I violated the ToS, but they can't specify which one because of course they have no option in their system for someone who was terminated for NO violation of their ToS.

tomschlick• 4 years ago

I would say your next step is a complaint here: https://www.consumerfinance.gov/complaint/

Generally those get treated seriously by financial entities.

imroot2• 4 years ago

I had 40K+ taken from me by US Bank after a payday in 2020. Writing the CFPB basically generated a response that "We're returning your money to the processors who send you money" from US Bank.

Guess who never reached out to me to ask why my bank was returning transactions? My employers.

When I called them to ask what had happened, their "Fraud Research & Gap Analysis" VP was shocked that this only caused a mild inconvenience to me (mainly because I split my payroll between a bank and a local credit union) and then pressed me to get the name of my credit union.

kingcharles4• 4 years ago

I did. I got a response very quickly. The response said absolutely nothing of value. It just said "We responded to your support request then terminated your account" but used 1000 words to say it.

0xy4• 4 years ago

You hit a flag for suspicious behavior and they can't tell you exactly what was suspicious because this allows fraudsters and criminal networks to adjust their operations accordingly.

People don't just get terminated for no reason.

Either you were doing something sketchy or you were acting in a behavior that is similar to previous fraud/criminal behavior.

I'm a legitimate customer and my credit card has been flagged for fraud numerous times at large companies (Steam, PayPal, eBay etc). Often temporarily, however.

(source: have worked in various fraud/risk departments)

andreareina2• 4 years ago

I hear this argument all the time. What I never hear is anything that actually helps to judge the trade-off. How often is a flag incorrect? How often is a legitimate user able to recover from the flag and how much effort does it take? I notice you say your flags have only been often temporary, i.e. sometimes permanent.

Are we really ok with throwing away due process because it might help the criminals? Sure nobody needs that game but access to money services is a bit different. And what you also never hear about is being refunded for all the content paid for in the blocked account.

mhitza• 4 years ago

They should at least tell you that a flag for fraudulent activity has been raised. At the same time I'd like for there to be some way to have an external auditor validate that it's not due to some bug or overzealous filter.

With GDPR such automated decision making can be stopped, and entities fined if not. Unless there's a big ol' exception for anything that falls under banking security & fraud.

QuietCF• 4 years ago

Imagine if we were writing our laws like this, or court rulings would go like this.

“We can’t tell you what evidence we used to convict you because that would mean criminals can adjust their operations accordingly”

And then you hear someone say “people don’t get convicted for no reason”

I have no idea if the OP did or did not act fraudulently and I’m aware that we are talking about a private and not a government entity here.

kingcharles4• 4 years ago

I bought an item online. It was shipped, but never delivered to me and FedEx returned it to the merchant. The merchant does not reply to any communications. I had already asked Square for a refund before the package shipped (as it shipped 6 weeks late). It took Square three months to even respond to my chargeback request. They asked for copies of all communications and the shipping logs. I gave them everything. They said they could not do a chargeback since the package shows as "delivered" and their script does not allow them to deviate from this. We went back and forth because I thought they were confused about me receiving the package. They confirmed they were not confused and that they fully understood that the package had been delivered back to the merchant and was never delivered to me, but it was still technically "delivered" so it is not possible for them to do a chargeback.

After that all their support would tell me is that I need to call FedEx and trick them into changing the status on the package to "undelivered" and they would happily do a chargeback for me.

Once we had gone back and forth on this a few times they said they had decided it was better to just terminate my account.

devoutsalsa2• 4 years ago

When your account was terminated, what happened to your funds? Recovered? Lost?

kingcharles4• 4 years ago

Eventually managed to exfiltrate it. I didn't have another bank account outside of Square, so I had to go and open one and was eventually able to get the money out.

Funny though - I tried to transfer the funds to my other Square account and it said "We cannot transfer funds to Square because of their excessive fees." WTF.

deftnerd• 4 years ago

This seems disingenuous to me, but my personal experience with Coinbase colors my opinion.

I had my Coinbase accounts canceled more than 5 years ago. Despite my merchant account with them processing over 1MM USD a year in BTC, they refused to tell me why they terminated my merchant and personal account.

At the time, I was buying physical giftcards in bulk from official wholesale distributors for 90c on the dollar, scanning and OCR'ing the redemption codes, and was selling those for the BTC equivalent of $1.05 on the dollar.

At the time, some of those merchants had their own plans for digital giftcard distribution and said they didn't want to be associated with cryptocurrencies. I ignored their pressure because I was staying true to the law in regards to various resale doctrines.

I suspect some of the larger merchants pressured their financial partners to represent them and put pressure on Coinbase.

I didn't mind writing my own bespoke payment processing system to replace them, but the loss of an easy USD <-> BTC gateway did make life quite a bit harder. Since my move to NY, it's been even more difficult because there are few companies that are allowed to operate here.

JimDabell• 4 years ago

At the time, I was buying physical giftcards in bulk from official wholesale distributors for 90c on the dollar, scanning and OCR'ing the redemption codes, and was selling those for the BTC equivalent of $1.05 on the dollar.

Isn’t this kind of thing usually associated with criminal behaviour? Why would somebody buy $1 of gift cards for $1.05 worth of Bitcoin instead of using an exchange? Seems like the main appeal is avoiding KYC laws that the exchanges follow isn’t it?

cbdumas• 4 years ago

I really can't tell if the comment you are responding to is satire. "I don't know why Coinbase would ban me all I did was use their platform to launder money"

pavel_lishin• 4 years ago

What's an example of an official wholesale distributor of gift cards?

Because the description 100% sounds like you were buying stolen gift cards in bulk.

0xy4• 4 years ago

The sources are rarely stolen. I used to work in this area for a large e-commerce company and generally what happened is a retail partner would have a sale on gift cards (15% off or something like this), and organized people who did this for a living would buy up multiple thousands in discounted gift cards, often chaining other discounts to get up to 20-25% off.

In our case, the arbitrage operators would try to extract the money themselves by using gift cards to buy goods that retain value well (Apple products, gaming consoles etc) to resell. The company is taking a hit, but it's often not outright theft. Technically, they're just savvy customers.

As for this case, it sounds like he's buying from genuine wholesale distributors who get gift cards from below face value anyway.

Retail outlets would never agree to sell gift cards without clipping the ticket, therefore they aren't paying $100 for the $100 gift card they sell you.

dannyw2• 4 years ago

I remember buying gift cards from you! So upsetting when Coinbase shut down your account.

davidcbc• 4 years ago

Why were you buying gift cards for more than they are worth?

Animats• 4 years ago

Coinbase has a social network. Why would a money exchange have a social network? To help with pumping crypto. "We want to help self-empower the community with easy-to-use sharing tools making it simpler and more fun to share information on your portfolio allocations or key crypto topics such as emerging new assets," said Coinbase."[1]

Yes, they actually said that.

[1] https://decrypt.co/85906/coinbase-social-media

xyzzy_plugh• 4 years ago

Is this so weird? In the context of crypto it certainly reads as predatory.

But let's look at Trading View for example. A social network built around trading software. They already have tight integrations with a few brokers, what if they did their own orders?

I'm no fan of Coinbase but this is a weak argument.

skybrian2• 4 years ago

From a user perspective it seems like a bad idea to talk about finance and do trades using an account at single company? I wouldn't want my bank account connected to my Reddit account, or any other social media account. It seems excessively centralized?

NicoJuicy• 4 years ago

? Tf

Trading-view does integration with brokers because it earns affiliate money.

Coinbase does sharing of orders or whatever to hype pump and dump and expose they did it through Coinbase.

That's literally not on the same league.

pg_1234• 4 years ago

Yeah.

Coinbase is a business, and the primary goal of a business is to win ... financially.

Any tool or approach that furthers that is to be embraced.

It's not a moral or ethical argument, it's strictly financial.

And this isn't Coinbase's doing, it's the game that the Western world (particularly the USA) has dictated.

All Coinbase is doing is being better at playing that game.

This is simply one of the purest manifestations of the ethos of Corporate America ... voted into power by the good ol' citizens of the US of A.

judge2020• 4 years ago

To be fair, most fiat currencies today are effectively pyramid schemes with how the 'assets' in question (paper bills or numbers on a screen) only have value because people think they have value and they think they'll be able to purchase goods with it. The only difference between fiat and crypto is that fiat is often backed by people that can print more money/manage the supply, and integrating crypto into daily lives is a tall ask when the transaction fees can cost more than the amount of currency traded via that transaction.

Finbarr• 4 years ago

The only difference between fiat and crypto is that fiat is often backed by people that can print more money/manage the supply

This is really not the only difference. As Elon Musk recently said, the government has a "monopoly on violence" and acts as an authority that arbitrates disputes (up to and including between countries), works to ensure proper controls and regulations through laws, etc., all of which helps to underpin the value of the currency. Cryptocurrencies are backed by no central authority with these powers.

phantomathkg• 4 years ago

Please prove modern economy is a pyramid scheme.

gostsamo3• 4 years ago

Isn't the Bloomberg terminal something like that?

newbie7892• 4 years ago

Is the Bloomberg terminal a social network?

X6S1x6Okd1st• 4 years ago

Why would Venmo function as a social network?

throwawayay02• 4 years ago

What doesn't have a social network, these days?

grapescheesee• 4 years ago

Several trading sites (years ago now) had chat features on the side. They started out great and had mild spam and vulgar conduct. Over a few months they became so bad I could only look at it for a few laughs.

They hired more moderators to no avail and ultimately shut them down.

knaik94• 4 years ago

On the other hand, the goal of it is market share, not some novel coin. They have a stable coin and that honestly leads me to give the company goals the benefit of the doubt. The investment they are encouraging, outside of the fees they generate through transactions, is tied 1:1 with the usd by design.

pyuser5832• 4 years ago

Lots commercial services have their own internet forums. YCombinator, for example.

aaaaaaaaata2• 4 years ago

Building network effects of the underlying technology you've chosen to provide services on is one of the less evil things Coinbase is wrapped up in, wow.

technofiend• 4 years ago

After trying to recover a Kraken account opened when the service debuted, I can tell you they're no better. I'm skeptical there will ever be a killer financial app for Blockchain but if there is, despite how much people despise banks, I would still trust them over the current crop of vendors.

ignoramous• 4 years ago

I'm skeptical there will ever be a killer financial app for Blockchain

Not an expert, but I think, stable coins (including government-issued digital currency) and global payment rails built on top of it are going to be that killer financial app. And their proliferation the catalyst behind mainstream adoption of trading real-world commodities and assets on "defi" platforms.

vmception2• 4 years ago

I’d give this a 95% well done.

I think it is odd for Coinbase to actually have any carvout for a guiding principle levied globally. This seems at odds with their prior stance, but with the user generated content in their NFT marketplace it looks like they expect to have an issue. They literally probably are preparing a campaign with a bunch of divisive characters that exude opposing messages.

paulpauper• 4 years ago

i don't understand. coinbase does not host content. it is a trading/exchange platform.

vmception2• 4 years ago

they will when they’re NFT marketplace launches.

thaumasiotes• 4 years ago

coinbase does not host content. it is a trading/exchange platform.

So is AirBnb, but they have a content policy. It applies to any content you post anywhere.

jbkiv• 4 years ago

I am falling off my chair. There is something fishy going on here, or wacko. Or I just don't get it.

smokey_circles• 4 years ago

My house, my rules. Not censorship, not a violation of free speech.

Americans are such a fragile, precious people. Second they feel slighted it becomes this stupid parade.

Meanwhile, your civil liberties and rights are being stripped by the people telling you bullshit like Facebook is the one treading on you.

You just can't write narratives like this

ur-whale• 4 years ago

lol, grandstanding from the company that will terminate your account because they track where your coins go and what you do with it after you've withdrawn them from your coinbase account.

concinds• 4 years ago

I'm puzzled for 2 reasons:

1. The vast majority of account terminations for individual (not public-facing) services by financial platforms is linked to KYC, AML, and other risks; banks don't wait for the government to tell them to shut down an account, they do so preemptively if they detect "suspicious behavior". There's plenty of stories of people with "unusual transactions" (e.g. freelancers who receive a few thousand £/$ in deposit) and get suspended by Revolut, with support that refuses to talk to them, because Revolut wants to cover their ass and ban people proactively even without hard evidence of fraud. You probably know someone who's been banned from a bank for "suspicious behavior" who don't even know why they were banned. Anyone who hung out around Bitcoin subreddits a few years ago has heard stories of this happening with Coinbase. The risk for Coinbase users isn't politically-motivated bans, it's bans for "no reason in particular".

2. They link to Cloudflare's famous "Why We Terminated Daily Stormer" article as further readings; but Coinbase terminated Daily Stormer months earlier than Cloudflare, for (presumably) an infrastructure, non-public-facing product. Presumably Daily Stormer didn't violate US laws. Here, they claim to only terminate private-facing infrastructure for illegal activity, so this marketing post about their "philosophy" doesn't seem to match their behavior.

avionicsguy• 4 years ago

I'm not puzzled. Coinbase is great as long as you stay in crypto it's the fiat to crypto that causes concern. I'm about/in the process of cancelling/closing all my accounts.

Why?

In the TOS they (Coinbase) state your crypto will always be your crypto. You are free to withdraw at any time. That's BS. Not only was I told to FO by coinbase support but they said any further contact would result in the exact same answer (FO).

That said, I had a large ( like 2k usd) deposit (in ETH so no fiat) so I wasn't giving up. Was about to post on Reddit, or elsewhere but they finally unfroze my account after a month.

Most people in crypto don't use Coinbase except maybe the whales because there are incentives for whales. Smaller players get screwed.

polski-g• 4 years ago

Cloudflare banned Daily Stormer because their IPO manager said they'd drop them if they didn't.

hrdwdmrbl• 4 years ago

I got banned for mixer use. Is using a mixer illegal?

capableweb• 4 years ago

No, Coinbase is a company that makes its own decisions, has nothing to do with laws. No obligation that they have to accept anyone.

steipete• 4 years ago

lol they blocked my account without any reason given. Sure. Do what you preach.

wilde• 4 years ago

There’s something deeply funny to me about the world’s largest vendor of unregistered securities claiming to base their decisions on the rule of law.

pyuser5832• 4 years ago

It sounds like they don’t have a good understanding of the First Amendment.

* The first amendment does not consider “hate speech” to be fighting words.

* The first amendment does protect falsehoods. The case mentioned from the 1970s was recently overruled.

The exceptions to the first amendment they mentioned are narrower than they are portraying them as.

It’s fine to use the first amendment as “inspiration” or a starting point. But please create your own list of exceptions.

Those exceptions are the point where you can be imprisoned, not kicked off a platform.

Coinbase’s philosophy on account removal and content moderation

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