However, we also think that the experience of instant transfers is valuable, so on a risk-based approach we allow instant transfers using ACH for certain customers and certain transaction sizes.
You have a fundamental misunderstanding how ACHs work. There's no such thing as an ACH that is "completed". At +180 days the state is "It is probably going to be fine". At +365 days the state is "It is probably most likely going to be fine" etc.
Source: Done consulting for execs at medium sized banks.
You're right that ACH reversals can come far after the payment appears to be settled. Based on the customer and transaction size, we treat the ACH as "completed" (i.e. available to buy Bitcoin with) at different points in its lifecycle.
You might have a fundamental misunderstanding of their business model.
They don't need to classify an ACH as "completed" or "not completed", they only need to place a confidence interval on its completion state, which becomes easier as they process more transfers.
They don't need to classify an ACH as "completed" or "not completed", they only need to place a confidence interval on its completion state, which becomes easier as they process more transfers
They ignore financial regulations to the level of Uber ignoring taxi regulations. The difference between the taxi commission or whatever its name is in San Fran and US Department of Treasury is that the later relies on people with guns and can block customer's ability to do any financial transactions.
The reason why in the standard custodial scheme ACH transactions are fine ( but still are frowned upon ) is because the appreciating asset can be reclaimed from a custodian via courts.
Non-transactional nature of ACH are a feature, not a bug. The legit exchanges account for it using in house compliance departments, risk management groups and people intimately familiar with the cash management side of the finance industry.
Comments
You have a fundamental misunderstanding how ACHs work. There's no such thing as an ACH that is "completed". At +180 days the state is "It is probably going to be fine". At +365 days the state is "It is probably most likely going to be fine" etc.
Source: Done consulting for execs at medium sized banks.
You're right that ACH reversals can come far after the payment appears to be settled. Based on the customer and transaction size, we treat the ACH as "completed" (i.e. available to buy Bitcoin with) at different points in its lifecycle.
You might have a fundamental misunderstanding of their business model.
They don't need to classify an ACH as "completed" or "not completed", they only need to place a confidence interval on its completion state, which becomes easier as they process more transfers.
They ignore financial regulations to the level of Uber ignoring taxi regulations. The difference between the taxi commission or whatever its name is in San Fran and US Department of Treasury is that the later relies on people with guns and can block customer's ability to do any financial transactions.
The reason why in the standard custodial scheme ACH transactions are fine ( but still are frowned upon ) is because the appreciating asset can be reclaimed from a custodian via courts.
All legit exchanges (e.g. Coinbase and Gemini) have this problem but there's really no better way for consumers to transfer USD.
Non-transactional nature of ACH are a feature, not a bug. The legit exchanges account for it using in house compliance departments, risk management groups and people intimately familiar with the cash management side of the finance industry.