Thinking About Buying Bitcoin (BTC) in Cash App? Don’t, Here’s Why
I first heard about Cash App in 2017 through a former roommate. Since then, I have used the app religiously because I can instantly move rent money between my accounts. Cash App, at that time, worked seamlessly and flawlessly transferring the money within minutes every time, no questions asked. However, it seems that ever since they’ve added bitcoin, there’s been complications. Failed transfers and a culture of unexplained account closures that Cash App refuses to address seems to be the norm. Cash App’s hush-hush standpoint on closing accounts due to bitcoin transfers should make anyone leary about stashing their bitcoin there.
You might not be able to actually cash out your bitcoin. I had gone out to a restaurant in Chicago and attempted to transfer money from my linked checking account. However, the app refused to transfer it and just said: “transfer failed”. I had never seen this error before. A measly $50 for the dinner wouldn’t transfer and I found myself in that embarrassing moment with the waitress waiting.
I eventually just paid using my bank debit card, but I had more than enough to cover the charge. My bank had no record of my attempts, so the fraud detection wasn’t triggered. Unfortunately, this occurrence suddenly started becoming the norm even with money already on my Cash App’s balance. Sending money to myself failed. Sending money to my mom failed. Cashing out failed. Daily, I had to put my Cash card to the side and just use my bank card because transfers repeatedly failed. Even $1 transfers failed and that’s when I knew something was wrong. I got tired of playing Cash App’s games after this carried on for so long. I turned off my direct deposit, disabled the card, and stopped using the app altogether for about a year.
Would you trust your money at a bank that only replied via email every 4 days? Probably not. Should anything go wrong with your account there’s no one to reach out to in a timely manner. Their customer service is too slow to respond, doesn’t respond at all, or just flat out can’t help you. In a nutshell, you’re on your own.
During that whole fiasco, the app became useless. I felt like I was walking on eggshells not knowing transfers were going to work that day or not. In most cases, I had to find alternative means to transfer my money which meant physically going to my bank. I reached out to Cash App support and was surprised to find that they didn’t have a phone or chat. Turns out they only have email which they reply to every 3–4 business days. If I ever needed to reach them for fraud, they don’t even have a phone number.
After 4 business days, I finally got a message. However, it was either automated or a canned message because it didn’t address my question. I waited all those days for nothing. The next reply came quicker, about a day or two later and the rep “reset” my account, whatever that means. My transfers started to work again, but it was short-lived.
The next day, the same transfer failed happened and again I had to wait another 4 business days. I also got the canned response again but this time they didn’t reset it and just told me to wait 3 days. I waited for 3 days. Still, my transfers failed. For weeks my card worked off and on, and by this time, I had probably sent about 20 emails to Cash App support which all came to dead ends. Their replies were always “try again later” or “try again in 3 days”. Even asking for a supervisor led nowhere. I asked them what was causing this and what could I do to avoid this from happening and they couldn’t, or rather wouldn’t, answer it. Instead, they basically told me just don’t use the app.
Cash App gives you a wallet to deposit and withdraw bitcoin. Ironically many have awoken to their accounts closed once they actually used it. None of the users know the real reason why Cash App closed their account because they were only told it was “for security”.
Across the internet and even on the Cash App reviews, there are countless complaints of rogue closures. Customers have had their accounts closed with their bitcoin and money still in it. According to Cash App’s Terms of Service, they allow 90 days to withdraw your money. The caveat to that though is you can only withdraw your money if the violation isn’t due to a transaction. If it is, then Cash App is going to put it on hold to investigate. You’ll get it back when and if Cash App sees fit. However, users have found themselves locked out of their accounts within minutes of receiving the email.
There doesn’t seem to be any rhyme or reason to the closures, so we can only speculate. Most users said they either purchased large amounts of bitcoin or transferred it out of Cash App to their hardware wallets or an exchange. Coincidently, they found Cash App had closed their entire account indefinitely weeks or even months later. They don’t have the ability to ever open a Cash App account again.
The Terms of Service also offers no explanation of what actions could get your account closed. It’s a pretty vague document and doesn’t define what you can and can’t do or to what extent. There are weekly limits but there are still users whose accounts were closed below those limits. The amounts transferred nor the times transferred don’t seem to matter though either. Complaints ranged from as little as one time to several, so the reasons are under speculation. A Redditor said they only bought $10 worth of bitcoin in the Cash App once. They then transferred it to their hardware wallet, only to find their account closed for a “violation” days later.
I have a hard time believing that all these users are into a life of cybercrime. There are pages upon pages of complaints of rogue account closures, even on the BBB site. I chalk the closures up to a bad or too sensitive fraud detection algorithm detecting false-positives. It could also be that Cash App’s ToS is left to their own interpretation. A ToS that is so easy for innocent people to violate for mundane things like forgetting to update their phone number or street address, that the Dalai Lama could find himself banned from Cash App.
Cash App is not really a place I’d trust laying down my crypto. Especially since whether you’ve been naughty or nice is left up to their staff to decide who may know nothing about the crypto world. Their level of customer service has already proven itself to be far below the curve. You’d never be able to speak to anyone when an error occurs. As far as their “fraud detection” is concerned, their AI has you figured out. All they know is you wouldn’t have been detected if you weren’t up to something, so they have no desire to speak to you. You might get locked out of your own bitcoin indefinitely with no recourse to recover it in a timely manner if at all. In my opinion, it’s just not worth the risk.
Cash App doesn’t clearly define what you cannot do on their exchange. So to err on the side of caution, I recommend steering far away from it because it’s too risky. You might think you’ve done something absolutely normal, but their algorithm could beg to differ. As a result, your account could get shut down in a shroud of mystery. The feeling of possible account closure looming over my head is enough to keep me away. From my experience with real crypto exchanges, they only kick people for doing something obviously against the law. However, with Cash App, it seems to be common for a simple transfer or how much you’ve purchased.
I recommend sticking with the original players in the cryptospace such as Coinbase and Binance. These exchanges don’t have a reputation for closing down accounts for elementary actions. And although I think you’ll be fine with Cash App’s fractional shares, Robinhood or Acorns are going to be better choices. The reason for that is violating Cash App’s ToS for bitcoin, will lock you out of your stocks as well. So, as a result, it’s best to forfeit convenience and keep things separate. Robinhood will be releasing fractional shares too soon, so it might be worth the wait. Despite all of Cash App’s new features, it’s best to only use it for peer-to-peer transfers. Keep their new features on the backburner for now until they’ve improved and gained our trust in handling bitcoin.
Published at Mon, 23 Dec 2019 23:58:00 +0000
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