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#2248315 - 01/28/21 07:25 PM Outgoing ACHs to Coinbase???
J_G Offline
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Joined: Dec 2010
Posts: 259
We are suddenly getting alerts in our automated monitoring program for transactions that contain the keyword of Coinbase. We have some customers without outgoing ACHs to Coinbase. Do we consider this unusual? I am thinking no, but also not sure since it is set up as an alert in our system. Thanks.

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BSA/AML/CIP/OFAC Forum
#2248316 - 01/28/21 07:31 PM Re: Outgoing ACHs to Coinbase??? J_G
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
It's not illegal to buy virtual currency. However, you should be evaluating the activity to make sure your customer is not acting as a bitcoin exchange and buying and selling on behalf of other people (which would make them an MSB) or that they are purchasing virtual currency because they are a Ransomware victim.

Here are some resources to help you:

FIN-2019-G001 Virtual Currency Guidance

Virtual Currency Mixer Fined

Peer to Peer Virtual Currency Exchanger fined

FIN-2020-A006 Advisory on Ransomware
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#2248372 - 01/29/21 02:50 PM Re: Outgoing ACHs to Coinbase??? J_G
ACBbank Offline
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ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
To add to Brian's comment - how much are they spending and what's the source of funding? If the source of funding is legitimate and the transactions themselves don't appear to be inconsistent with your customer's profile, I don't see an issue.
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#2251684 - 04/01/21 05:17 PM Re: Outgoing ACHs to Coinbase??? J_G
Cbigun Offline
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Joined: May 2016
Posts: 167
I have tried to research Coinbase and understand that this is a platform to purchase/invest in virtual currency. I see ACH deposits have just started for $9100 and $9200 (in one month) from Coinbase and a few days later a payment to a credit card. This feels weird, but I can't seem to put my finger on why. Mainly because I don't totally understand the whole thing... even though my son has tried to make it seem like the most awesome up and coming thing...…… I'm newer to BSA and see that some training will be needed on this subject but thought I would reach out and see if this is something I should be overly concerned with.

The account CIP says the individual is a painter and I do also see transactions to paint stores so feel that is legit.

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#2251698 - 04/01/21 07:22 PM Re: Outgoing ACHs to Coinbase??? J_G
Local_Banker Offline
Member
Joined: Jun 2019
Posts: 76
If you see ACH deposits from Coinbase, you can look back in the history for past withdrawals to see if the customer might be cashing in some gains. Bitcoin and other virtual assets have really gone up over the past year (and really, really gone up over the past 5+ years). Coinbase is a registered MSB and also a 314(b) participant. You can send a 314(b) request if you see something really suspicious.

But I agree with ACBbank, we are seeing a lot of people investing legitimate funds (e.g. payroll) in virtual currency right now.

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#2251771 - 04/02/21 07:18 PM Re: Outgoing ACHs to Coinbase??? J_G
Cbigun Offline
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Joined: May 2016
Posts: 167
Thank you for your response. I agree that virtual assets have increased. I think the "just under $10,000" was making me question. BSA makes such a big deal about structuring just under and I don't know if that is able to be done with virtual or not..... more research.

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#2251778 - 04/02/21 08:14 PM Re: Outgoing ACHs to Coinbase??? J_G
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
People are funny - they have the $10,000 figure ingrained into them and think every transaction over that amount is reported to the gov'mint. I would say that if I saw many more of these types of transactions, I would be picking up the phone and asking the customer for an explanation, if the volume of incoming ACH seems disproportionate with normal lifestyle and activity of the customer. Lots of elicit activity happens through crypto $ also.
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