New Coinbase verification process has some users up in arms

Coinbase has added new withdrawal limits on the GDAX exchange which requires users to verify (and in some cases re-verify) their account information. Users who do not verify their accounts by August 1, 2016 will have their accounts suspended from trading activity.

In a message alert to all users via the GDAX exchange and also via email, Coinbase sent out the following update:

We are improving account limits and funding options on GDAX. These improvements are scheduled to be enabled on July 7th, 2016

Same-day bank wires

Same-day deposits and withdrawals will be available for U.S. customers via bank wire transfer. It’s now easier than ever to move USD into and out of your account.

Withdrawal-based limits

We are simplifying our limit structure. All customers will have unlimited deposits and a $10,000/day withdrawal limit. This limit applies to the combined value of local currency and cryptocurrency.

Please complete the quickstart to update your account details. You will only be prompted to update information that is missing from your GDAX account.

If your account details are already complete, you will be redirected back to GDAX.

Accounts that remain incomplete by August 1, 2016 will be suspended from trading activity.

For users who haven’t yet verified their accounts or who already verified their accounts but need to re-verify pieces of information or face trading suspension have voiced their displeasure via social media. A user on reddit wrote,

This is maybe the fourth round of verification I’ve personally had to go through just to maintain an account with Coinbase. Why? You don’t communicate any of the rationale behind it – there’s a perfectly good notification box in the upper right of the GDAX UI that you blithely announced to the world that you’d be opening ETH trading with. That seems like a good place to start.

To further aggravate the situation, Coinbase suffered an outage overnight affecting all users who were getting an error page. The issue was resolved, and those who continue to see the message should clear their cache and try again or open GDAX in a different browser. Nevertheless, the outage plus the new changes has created a boiling pot of issues for the exchange.

Coinbase officially launched the GDAX exchange in May, which included new changes such as adding support for ethereum trading. Coinbase has long been criticized for their compliance policies. Coinbase clearly has taken the stance of being compliant with any regulations that typically apply to banks and financial institutions, in order to remain in good standing. Earlier this month Coinbase and Circle both responded to the U.S. Office of the Comptroller of the Currency asking for better regulations.

Complaince doesn’t make Coinbase a lesser-quality exchange, and if anything, the quality and standards are higher than some other exchanges. However, this stance still rubs some people the wrong way who wish to not go through such lengths and KYC policies in order to use bitcoin.

With that said, Coinbase isn’t the only exchange on the market. There are many bitcoin exchanges with less stringent policies, but in the U.S. to find a good reputable exchange you will have to follow some sort of KYC guidelines. For users who aren’t in line with this, they can trade via person-to-person using local traders on platforms such as Mycelium, LocalBitcoins, or Paxful.