Most investors who use the biggest Bitcoin exchange in the US, Coinbase, have been finding extra fees on their credit card statements of late. However, Coinbase has been quick to defend itself from accusations of any wrongdoing. The exchange recently released a statement on its blog about the fees, levied after each purchase.
Coinbase said that the charges, which now come with a separate line of items, listed as cash advance or cash equivalence on bank statements, were not from the exchange. Instead, the exchange said that they were coming from third parties. This was after banks and issuers of the cards changed the Merchant Category Code (MCC). The MCC system is a categorization system for merchants, used by tax agencies to help them follow the trail.
Charges Add Insult to Injury
These new charges are adding insult to injury in the US banking sector. In the US, the sector has decided to ban the purchase of digital currencies using credit cards altogether. While it is not the one collecting these fees, Coinbase admitted it had made a mistake by not communicating this to its users.
Coinbase further added,
Unfortunately, we don’t have a way of knowing when they might be charged or how much they might be.
The exchange advised its users to contact their banks and request them to waive the fee. If that did not work, they advised moving to a bank that had lower fees.
The Ban by US Banks
In the statement it released, the exchange also took the opportunity to address the ban by some US banks on the use of its credit cards. The exchange informed the users of its services that all debit card transactions were still allowed. However, it noted that there were limits in place depending on which account was linked to the Coinbase exchange. It was also noted that there was an overall limit for Coinbase, regardless of the payment method used.
Besides the subtle warnings on the site, the exchange is urging its users via email to switch to debit cards. Using debit cards or bank accounts, users can purchase Bitcoin Cash, Bitcoin, Litecoin, or Ethereum on the site. These are the four digital coins that the exchange currently accepts. With a bank account purchase, it takes about seven days before the coins show up in your wallet. For a long-term investor, this is great. However, this is not so good for a trader.
Coinbase also pointed to the record signups in December as being great, but that they had placed a burden on its verification system. The result has been huge delays in the process. The exchange has since integrated more ID verification providers and boosted the verification systems. In case of any future developments, the exchange will make a statement on its social media accounts and blog.
What do you think about the latest move by banks to impose fees on card users? Leave us your thoughts in the comments section below.