Legendary Web Browser Designer Marc Andreesen Is a Coinbase Backer
The leading Bitcoin exchange, Coinbase, is cancelling access to their services of people who make deposits on “Seals with Clubs”, the world’s leading Bitcoin-only online poker room. That’s the word from at least one player with an account at Seals with Clubs.
The player claimed on Reddit that his Coinbase access was cancelled after he made a deposit at Seals With Clubs. While SwC is not well-known to gamblers who play at the leading UK and Gibraltar based online casinos, Seals With Clubs is a key Bitcoin-only gaming platform.
Reddit Comments from Banned Player
One thing notable about this single player’s story is the notice he received from Coinbase. The player posted these comments online, which is seen by several online poker news sites as an indication of a rigid policy by Coinbase. While this policy has not been confirmed by the company in question, it also has not been denied.
The posted comments attributed to Coinbase included the statement that Coinbase is “a regulated Money Service Business under the FinCEN division of the U.S. Treasury Department.” The statement sent to the banned player also noted it “is illegal under US law“, which is still a debatable prospect.
About Coinbase
Coinbase is a top Bitcoin exchange on the Internet. The online wallet service works much like Neteller, Skrill, or PayPal would. In the case of Coinbase, the only currency used is Bitcoin, the virtual currency created in the wake of the 2008 stock market crash and Global Recession.
Coinbase allows people to store Bitcoins at the e-wallet service. The company also allows people to receive Bitcoins from other people, while sending them on to other people.
Coinbase’s Prohibited Businesses
Coinbase has a long list of “Prohibited Businesses”, which are barred from using Coinbase’s service. This includes a number of banned business, or online economic activity which is associated with illegal undertakings.
The banned list includes the sell of stolen goods and counterfeit products. The list also includes illegal activities like prostitution and extortion. Gambling is also on the banned list, though the activity tends to be legal in most jurisdictions in the world.
Original Reddit Post
Theoretically, players using Bitcoin remain anonymous. That is not a 100% guarantee. One description suggests that the transactions are “mostly” anonymous, but can be traced if a person perpetrates crimes. Therefore, anonymity comes down to the e-wallet’s definition of “illegal”.
In the original Reddit post, the player was giving advice for getting around the ban. US Poker Sites posts such a link for news purposes, so those who want the full story can know what was posted. Posting such a link in no way should be considered an endorsement of the poster’s suggestion that people could or might get around such a ban. It is best for gamblers to make their wagers in a legal fashion. Any gray area can lead to trouble.
New Policies Tied to Corporate Deals
Since May 2013, FinCEN has taken responsibility for Bitcoin regulations. It offered a new definitiion in its regulations for what an exchanger or money transmitter is, which certainly accounts for Bitcoin.
Marc Andreesen is among the backers for Coinbase. Andreesen co-wrote the first Internet browser, Mosaic, which became the Netscape browser. Andreesen also sits on the Board of Directors for EBay, Facebook, and Hewlett Packard. A few days ago, Coinbase began discussions with Ebay and PayPal on becoming the Bitcoin processor for the twocompanies.
Such a large corporate deal might be the motivation for Coinbase’s new enforcement policy. When companies become part of the mainstream economy, they often shy away from gambling transactions–at least in the wake of the UIGEA. Gambling industry analysts believe one of the reasons the legalized gaming markets in New Jersey and Nevada is the fact most banking institutions still stay away from gambling transactions.
Is US Online Gambling Legal or Not?
Some of the institutions might still believe gambling is illegal across the USA, while it is fully legal and regulated in several US states. Banking institutions see the risk and not the profit of processing gambling payments, so they stay out of the industry altogether.
Coinbase’s concerns might be unfounded. Several news sources recently reported that PayPal itself is considering delving into the New Jersey online gambling industry. If so, then Coinbase might follow its potential business partner’s example at some point. For now, Bitcoin gamblers will need to find a new way to deposit and withdraw their funds.
