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Coinstar KYC Hurdles Are Hurting Bitcoin User Experience

Esther Kim

Esther Kim | Jan 21, 2019 | 12:00

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Coinstar KYC Hurdles Are Hurting Bitcoin User Experience

Esther Kim

Esther Kim | Jan 21, 2019 | 12:00


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Coinstar’s initiative to support buying bitcoin at 20,000 locations in the US is facing mixed reviews days after it launched as users complain about high costs and poor performance.


AML/KYC Overload

Coinme, the Bitcoin ATM operator which began offering purchases in 2014, teamed up with change counter Coinstar last week to let customers purchase bitcoin for cash using the same apparatus.

As user experiences began surfacing on social media, however, not all appeared to be going to plan.

Specifically, reviews slated the overreaching security measures Coinme and Coinstar had implemented. To buy Bitcoin, one commentator wrote on Twitter, it was necessary to provide an email address, phone number, name, ID verification and even a selfie photograph.

“Lame but not unexpected. Seems silly for such a small amount,” the commentator, known as CryptoParadyme, wrote about their $25 purchase.

Fees, IDs And Technical Issues

The current US regulatory landscape surrounding cryptocurrency ownership focuses on blocking covert profiteering from cryptocurrency trading, with major companies such as Coinbase previously facing data inspection demands from authorities.

coinstar change machine

While such situations appear beyond the control of Coinme, criticism of its latest move also involved poor technical reliability of its processes.

CryptoParadyme summarized about the experience:

Buy bitcoin with cash, then fill out a form, submit your ID and selfie, wait over an hour and give us your email to make an account.

The purchasing process was further beset by problem with Coinme’s app, which failed to load all the necessary steps from mobile.

In all, a $25 Bitcoin purchase cost around 4 percent in obligatory fees, as well as “extra markup” on the price of Bitcoin itself and larger-than-average transaction fees, they added.

Coinme had not replied publicly to the Twitter review at press time.

As Bitcoinist reported, despite the downturn in cryptocurrency markets lasting over a year, the Bitcoin ATM industry continues expanding. The US alone currently has almost 3000 machines, the most out of any country worldwide.

What do you think about Coinme’s Bitcoin purchases via Coinstar? Let us know in the comments below!


Images courtesy of Shutterstock

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