Should Banks be concerned with CoinBase transactions posting to their customer accounts.

I've noticed several of our ATM Check cardholders that have CoinBase transactions posting to their account. Recently there was a CoinBase/Visa dispute concerning duplicate CoinBase transactions that posted. We received credits from CoinBase that reversed the double charges.

I assume the original transactions are customers using bitcoin ATMs.

Should banks not allow their customers to use CoinBase? What's the REG E risk to the banks when original CoinBase transactions come into the bank as either an ATM withdrawal or a Check Card Purchase. Are these transactions covered under REG E

Sure they are - no different than them buying a carton of milk.

Should Financial Institutions prohibit their customer's from making bit-coin purchases through CoinBase? If the transaction is covered by REG E I don't see a risk to the bank by allowing the retail customer to purchase bitcoin. The risk would be on the customer who purchased the bitcoin and subsequently it decreased in value.

Since bit coin is a virtual currency would these transactions present a higher risk for banks and require enhanced due diligence monitoring as part of BSA. We, the financial institution, are not opening an account with Coinbase, it's our retail customer who has the account with us and is choosing to purchasing the bit coin; so my thought is that the risk would be on the customer that purchased the bit coin and not the bank since the customer transaction would appear to be covered under REG E.

Additional thoughts?

If you are talking about one-off or small dollar transactions, I don't see any BSA concerns. People invest in all kinds of things. Like anything, if you start seeing a large amount of transactions and you have no idea where the funding is coming from - your BSA radar should start pinging.

Agree with Randy. We focus on larger transactions and if they appear to be a dealer or exchanger, not if they're investing in virtual currency personally or if we see small dollar transactions.

Edited to add: After re-reading the original question, my response is not even related to that question. Not only that, I can't even provide an opinion on the Reg E aspects. My apologies!