Cubits disables credit card bitcoin buying feature due to fraud

Buying bitcoin with credit cards wasn’t always easy, just a year or two ago it was very difficult to purchase bitcoin with a credit card because so many services didn’t accept it.

Times changed, and buying bitcoin with credit cards has become more accepted and commonplace now among many bitcoin exchange and brokerage services. However, credit card fraud is always a risk.

In a report released earlier this year, it found that 18% of the identity fraud using U.S. credit cards, or $2.4 billion, was conducted outside the U.S. There was an average of $1,585 per incident. And with data breaches on the rise with major retailers across the world, your credit card data is at high risk of being stolen and used fraudulently.

In the fall of 2015, UK based bitcoin exchange Cubits added credit cards as a payment method to purchase bitcoin. Cubits customers who use credit cards to buy bitcoin are subject to a daily limit. For enhanced security throughout the buying process, Cubits employed 3DSecure to avoid unlawful uses of credit cards by third persons. 3DSecure combines two-factor authentication and password protection. Furthermore, customers who want to buy Bitcoin via credit card need to be verified by IDnow.

However, it appears even though Cubits had enhanced fraud detection and security methods, it wasn’t enough to stop criminals from using stolen credit card data to buy bitcoin on the exchange.

In an email sent to us by Cubits today, they issued the following statement:

At Cubits, security is our highest priority. This naturally counts for our customers, but also for those who do not actively use our services.

In the past days, we have experienced a strong rise in Bitcoin purchases conducted with stolen credit card data. As a result we have decided to temporarily disable credit card payments. While we are working on a solution for this, instant Bitcoin purchases naturally remain possible using Skrill, OKPAY, dotpay and soon Neteller. We hope to reactivate card payments some time very soon again.

We are very sorry for the inconvenience caused.

For any questions please contact us any time at support@cubits.com

Unfortunately, since the exchange has been hit with a high level of fraudulently activity, credit card buying has been disabled temporarily. Instant purchases are still available to customers via other methods.

Cubits just added Skrill as an approved withdrawal funding method for users selling bitcoin, following the addition of adding Skrill as a payment method to buy bitcoin in April.

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david@bitcoin.com'
David is a writer, researcher, and developer who is passionate about bitcoin and blockchain. He writes for Bitcoin.com, Blockchain.com, and is the founder of Bitcoinx.io (which was acquired by Bitcoin.com). David previously used to write and curate for Myspace and has worked in the fintech and payments space for over 15 years.