Yesterday, we wrote that Coinbase customers were being charged multiple times for past transactions.
While some speculated that the erroneous withdraws were down to a Coinbase engineering issue, Coinbase issued a statement saying it wasn’t liable for the duplicate charges. The blame, instead, rested with Visa for the way it handled a migration of merchant categories for cryptocurrencies, Coinbase said.
While you can read my post yesterday for an in-depth description of what happened, the basic gist is that Visa refunded and recharged (under a different merchant category) a month of old transactions. Many users saw the recharge come through before the refund processed, making it look like they were double charged. Honestly, the issue was likely exacerbated by existing payment rails — it’s normal for refunds to take multiple days to show up on credit and debit statements.
But here’s where it gets weird — this morning Visa issued a statement to some publications shifting the blame back to Coinbase, telling TNW that “Visa has not made any systems changes that would result in the duplicate transactions cardholders are reporting.” We are also not aware of any other merchants who are experiencing this issue.”
But now it seems that the payment giant has revised its stance, and clarified that it wasn’t Coinbase’s fault.
The following is a joint statement from Visa and Worldpay, which is Coinbase’s payment processor partner. While Coinbase initially distributed the statement on its own blog, we’ve also received the statement directly from Visa.
Over the last two days, some customers who used a credit or debit card at Coinbase may have seen duplicate transactions posted to their cardholder accounts.
This issue was not caused by Coinbase.
Worldpay and Coinbase have been working with Visa and Visa issuing banks to ensure that the duplicate transactions have been reversed and appropriate credits have been posted to cardholder accounts. All reversal transactions have now been issued, and should appear on customers’ credit card and debit card accounts within the next few days. We believe the majority of these reversals have already posted to accounts. If you continue to have problems with your credit or debit card account after this reversal period, including issues relating to card fees or charges, we encourage you to contact your card issuing bank.
We deeply regret any inconvenience this may have caused customers.
While the statement doesn’t give a ton of clarity on the issue, it seems to absolve Coinbase of any blame, which is a win for the startup considering it’s been trying to prove to the world that its engineering and customer service teams can stand up to the challenge of maintaining a reliable financial platform.
Indeed, Coinbase CEO Brian Armstrong hit out at media reports that initially placed the blame for the snafu on Coinbase.
The startup — is valued at $1.6 billion after raising $100 million last year — has endured some challenging periods as it continues to scale its service to accommodate its 10 million-plus registered customers.
Issues over the past year have included muddling prices on Overstock.com, a flash crash, and a general struggle to keep up as cryptocurrencies boomed in 2017. In December, Coinbase launched an internal investigation into suggestions that company insiders profited from knowledge of impending support for Bitcoin Cash.
Note: The author owns a small amount of cryptocurrency.
Jon Russell contributed to this story. He also owns a small amount of cryptocurrency.
Featured Image: Håkan Dahlström Photography/Flickr UNDER A CC BY 2.0 LICENSE
Line, the messaging app with around 200 million monthly users, is embracing bitcoin and other cryptocurrencies to fend off increased competition from Facebook and others.
The Japanese company told announced the creation of a new financial services division which will spearhead a move into cryptocurrencies and other services including loans and insurance. Line already operates a payment service — which claims 40 million users $4 billion in annual GMV — but now it plans to do much more.
Line said it has applied for a cryptocurrency license in Japan — where more than a dozen exchange and other businesses have been approved — which is currently under review.
Bloomberg reported earlier this month that Line was considering a move into crypto, but at this point it isn’t clear exactly what that will entail. From the announcement, Line said it will operate a marketplace inside its app where people can trade crypto and get loans or insurance. It said, too, that it will look into how it can use blockchain technology within its services.
Loans and insurance, while not as attention-grabbing a crypto, may prove to be lucrative ventures in markets where Line has strong recognition among consumers.
The company is need of something fresh to revitalize its business in the wake of increasing competition from Facebook, which operates WhatsApp and Messenger, the world’s most popular messaging apps with over one billion monthly users each.
Prior its $1.1 billion U.S.-Japan IPO in 2016, Line had targeted a global audience via its messaging service — which pioneered the concept of stickers — and a connected games business. Its international expansion didn’t go according to plan, however, and the company refocused efforts on its four core markets of Japan, Thailand, Taiwan and Indonesia, which account for 168 million of its active users.
In those markets, it offers a range of localized services that include a video streaming, manga cartoons, shopping, ride-hailing and other on-demand services. Last year, it began to sell smart hardware and AI to offer its own cartoony alternative to Amazon’s Echo range and Google Home devices. In some markets, it also offers a Line-branded mobile phone/data service.
There’s plenty of pressure, however. Facebook’s global popularity makes Messenger an option for most internet users on the planet while the company is busy in other areas. WhatsApp recently moved into business solutions that allow companies to correspond with users via its service, and it is tipped to move into payments soon. CEO Mark Zuckerberg has also pledged to look into whether Facebook can make use of blockchain technology.
Line will hope these new services can boost its business in its strongest markets and pick up new users in other countries.
Line might well be the largest consumer-focused business to adopt crypto to date. It is far from the only chat app, though. Kik raised $100 million in an ICO earlier this year, while there are also newer blockchain-based solutions such as Status. Then there’s Telegram, a chat app that has over 150 million users that is popular among the crypto community, which is planning a much-anticipated ICO that could raise upwards of $1.2 billion.
Line’s announcement comes as the price of bitcoin dropped below $10,000 for the first time since the end of November, according to Coindesk’s price tracking service.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.
A glitch on Overstock’s website allowed users to send amounts of Bitcoin Cash to Overstock when the system was expecting Bitcoin, leading to drastic discounts on many items. Given that BTC is about $14,000 and Bitcoin Cash is $2,400, the mistake could have been quite costly.
Originally reported by Brian Krebs, the exploit allowed you to send the required amount of BTC in Bitcoin Cash. Then, when you asked for a refund, the system would refund you in Bitcoin. This meant you could send, say, .048 ($135.91) in Bitcoin Cash on a .048 ($700) Bitcoin item, cancel the order, and receive .045 BTC back.
Logging into Coinbase, I took the bitcoin address and pasted that into the “pay to:” field, and then told Coinbase to send 0.00475574 in bitcoin cash instead of bitcoin. The site responded that the payment was complete. Within a few seconds I received an email from Overstock congratulating me on my purchase and stating that the items would be shipped shortly.
I had just made a $78 purchase by sending approximately USD $12 worth of bitcoin cash. Crypto-currency alchemy at last!
Krebs noted that this scam could have netted quite a profit. If a user had paid the BTC equivalent of a $100,000 diamond ring in Bitcoin Cash they could have sent over $15,000 and, after a refund, get $100,000 of Bitcoin. It’s a funny – and scary – glitch that Coinbase has since fixed.
Featured Image: Bryce Durbin/TechCrunch
Advocates for a bitcoin hard fork have now decided to cancel plans for the so-called SegWit2x fork. The bitcoin blockchain was supposed to split into two blockchains in roughly 8 days. But it looks like SegWit2x backers couldn’t convince enough people in the bitcoin community to make the SegWit2x blockchain the new mainstream bitcoin blockchain.
The SegWit2x fork should have increased the block size to 2 megabytes. This change could have helped when it comes to bitcoin scalability.
But it has always been a controversial change and many bitcoin companies have not actively supported the move. So many feared that this fork could have split the community into two branches.
“Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together,” the note says. “Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth.”
In other words, in order to keep the community together, SegWit2x backers have decided to call off the fork. The announcement has been signed by BitGo’s Mike Belshe, Xapo’s Wences Casares, Bitmain’s Jihan Wu, Bloq’s Jeff Garzik, Blockchain’s Peter Smith and Shapeshift’s Erik Voorhees.
They all met in person earlier this year in New York to agree on this two-part plan. The first part was a bitcoin update called Segregated Witness. This soft fork already happened back in August.
With SegWit, data is stored differently in each block — it leads to some nice bitcoin features. First, the SegWit updates improves the transaction capacity of the blockchain. It is also compatible with outdated versions of bitcoin software.
Lightning Network are now also possible thanks to SegWit. Lightning Network is a sidechain implementation that could solve many of bitcoin’s scalability issues. Instead of routing every transaction through the blockchain, transactions between two addresses could happen on a sidechain and you could settle those transactions every now and then with the main blockchain to ease the load.
The second part of this plan was the SegWit2x hard fork. While this fork won’t happen, SegWit is here to stay. So let’s see if companies and developers are going to take advantage of SegWit in the coming months.
Featured Image: Bryce Durbin/TechCrunch