
Buy BitCoin at Any Wells Fargo or Chase Bank - feydr
http://www.betabeat.com/2011/08/15/bitoin-exchange-chase-wells-fargo-exch/
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dkokelley
This system seems ripe for exploitation. Banks 'clear' checks by granting the
account holder access to the funds they expect to be available. A check can
still be bounced or returned days or even weeks later in the case of fraud.

This is how a very common scam works. Receive a check written for more than
you were expecting (usually for the sale of some goods or as prepayment for a
service). Receive instructions to deposit the check and return the difference
to them (with a healthy profit for your troubles). Weeks later, the check
bounces and your account is debited the amount of the check, while the scammer
has the cash you wired to them. Essentially, the scammer uses your good
standing with the bank to cash a bad check.

Given the nature of this system, what's to stop someone from depositing a bad
check, emailing the receipt, and receiving BTC after the funds are released
but before the check actually clears (or rather, bounces)?

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starwed
The scam and your idea seem fundamentally different.

I'm not sure exactly how this ExchB thing works, but since your exploit
involves personally writing a bad check, and then cashing it at a bank...
seems like you would end up being liable.

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hippich
Who said scammer will be using his own checking account to write checks?

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starwed
Ok, I obviously don't understand how this is an exploit of this particular
system.

It just sounds like a plan to pay for things with fraudulent checks, which
folk have been doing forever.

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tedunangst
People have been writing bad checks forever, which is why there are safeguards
such as withdrawal delays. ExhB is turning off the safeguards.

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trevoro
Are you buying BitCoin at Wells Fargo and Chase? Or are you just making a
deposit? This isn't as though these banks are carrying a balance of BitCoin as
they would foreign currency.

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lukejduncan
The title is link-bait. You're making a deposit

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NHQ
It is really a currency exchange. This is a pretty clever 'hack', to use
branch banking. They could conceivably offer other currency exchanges as well,
and compete with the same banks on the exchange rate. You really have to trust
the company tho, cuz you are depositing your cash into their bank account.

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jellicle
Step 1: give money to ExchB, "founded May 2011". Has been in business MORE
THAN A MONTH, therefore is ULTRA-TRUSTWORTHY. The invisible hand of the market
says so!

Step 2: ExchB gets hacked or gets "hacked", your money disappears

Step 3: profit!

Caution: the profit in step 3 may not be your own.

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javert
Step 1: Give money to ExchB.

Step 2: Withdraw bitcoins from ExchB.

That's pretty much how BitCoin is supposed to work. You store the coins in a
secure place, like your hard drive. The only real vulnerability is if ExchB
gets hacked or rips you off between Step 1 and Step 2. So don't do humongous
transactions, and do one at a time (which is probably what you'd do anyway).

Your argument is pretty much worthless. It's a straw man. If you don't
understand BitCoin, don't pretend like you do. If you do understand BitCoin,
don't make silly arguments.

Non-disclaimer: I am totally not affiliated with ExchB at all. I don't even
own any BitCoins.

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wmf
There's not much risk for a one-time transaction, but Bitcoin daytraders need
to keep a balance at the exchange.

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javert
I agree with you, I don't think daytrading with bitcoin is practical at all
right now, without trusting the exchange. (If any bitcoin insiders want to
prove me wrong on that, I'd be delighted.)

Anyway, the point of bitcoin isn't daytrading. I think a service like this
facilitates moving dollars to bitcoins for people who want to actually use it
for bitcoin transactions, so the snide remarks about this service that I've
seen are just unwarranted.

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cowkingdeluxe
Misleading title.

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mcfunley
Yes, it makes it sound like those banks endorse bitcoin in some way.

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timtadh
Note: According to their terms[1] if ExchB looses your money (either USD or
BTC) they are not liable for that money. Bitcoin is interesting, but these
exchange markets are so shady. There is essentially zero consumer protection
when using them. I have the expectation when I deposit money in an account to
have the assurance that money will be available to me, no matter what. ExchB
does not guarantee that. Therefore, I will not use their service or another
until such reasonable guarantees can be made.

[1] <https://www.exchangebitcoins.com/terms>

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javert
My apologies for saying something similar in a different comment, but:

Step 1: Deposit money to ExchB

Step 2: Withdraw bitcoins

Only vulnerability for you is when you've done Step 1 but not Step 2 yet.
Don't do humongous deposits, and don't have multiple outstanding transactions
with ExchB, and you'll be fine.

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wmf
Even after reading the ExchB site, I don't understand how this works. You
deposit money... into what account? Yours? How does it get to the exchange?

