WARNING: Do NOT Buy Gold or Silver from Bitcoin Site Coinabul

Update 12/19/13: I finally received my silver bullion order, six weeks later. I guess I wouldn’t have minded the delay if Coinabul communicated that it would take this long. But their site promised next day delivery and six weeks is not exactly next day. I also never received an apology or explanation for the delay. Bottom line is that it seems Coinabul.com is a legitimate source for buying bullion with bitcoin, as long as you don’t mind waiting several weeks for your delivery.

Update 11/19/13: A customer service representative finally called me back after I had left a few messages in the past week and had never been able to get through. His name was Nolan and he said they have my order and it should ship within the next few days. When I suggested that Coinabul let customers know that orders could be delayed by weeks (despite the cart saying next day delivery), he told me about banking regulations being a pain and running out of stock on silver eagles. I am sure those things are true, I just wish they would be up front with their customers and tell everyone when they are out of stock and can’t deliver for weeks or months.

I hope to provide another update this week after I am sent tracking information and my order is on the way. As I’ve said, I really want Coinabul to succeed, but they need to get their customer service in order and communicate better with customers. I really hope to report they are not fraudulent, just incredibly slow at shipping bullion.


* * * *

This a quick warning message to gold and silver investors: DO NOT purchase any bullion from the bitcoin website Coinabul.com. This site has built a reputation as the first and one of the only sites to accept bitcoin in payment for gold and silver. I have used them in the past with no problems, but when I tried to contact them about my latest order, nobody picks up the phone or replies to emails.

Their phone number goes to a message saying to call back tomorrow during business hours, even if you are calling during regular business hours. I have also found several other people on popular bitcoin bulletin board sites complaining about never receiving their orders from Coinabul or receiving them months later.

While the irreversibility of bitcoin and ability to transact anonymously can be a benefit in many situations, in this instance it means that I might have been ripped off without recourse to recover my payment. Fortunately, I only made a small purchase with a fraction of my bitcoin holdings, but the company could be pulling in thousands per day in bitcoin payments.

COINABUL

Their website continues to function, updating prices on the fly, with no message about delays or other fulfillment issues. The items that I ordered, American Silver Eagle coins, have even changed to the status: “out of stock.”

Using a site like Coinabul is a great way for those that have built up hefty gains in bitcoin to take some profit off the table by exchanging bitcoin for physical metals. In my view, this is an excellent time to do so, as bitcoin is now over $400 and precious metals are trading at very oversold levels after correcting sharply in the past year.

I will be updating this page if I hear anything back from Coinabul. Hopefully this was just a misunderstanding and they will respond soon, but I am not holding my breath after reading similar stories from others (links below). It seems silly to rip off a handful of customers and lose all credibility in a business that was legit for a long time and apparently was processing a good amount of bullion orders every day. This loss of confidence in Coinabul opens the doors for competitors.

As an investor and proponent of both gold and bitcoin, I really want to like Coinabul. If there are supply issues or regulatory problems, they should simply decline orders or at least tell customers about the delays. If you can’t deliver as promised, return the bitcoin payment immediately. This is just simple common sense and good business practice.

In the meantime, please be advised that I still have not heard anything back from customer service after several days and multiple attempts to contact them via phone and email.

Here a few links to others complaining about Coinabul and founder Jason (Jay) Shore not delivering bullion:

https://bitcointalk.org/index.php?topic=149253.420

http://www.reddit.com/r/Bitcoin/comments/1jwnqq/do_not_order_from_coinabulcom_at_the_moment_the/

AGORA

If you would like to purchase bullion with bitcoin and are looking for an alternative to coinabul.com, check out Agora Commodities. I have no affiliation with them and have never used their website, but others have reported success and quick delivery. I am going to put through a small order and will review their service after it is fulfilled. It also appears that their prices are lower than Coinabul.com.

gsb

Another website that accepts bitcoin for gold and silver bullion is https://www.goldsilverbitcoin.com

By | 2017-03-23T14:06:21+00:00 November 14th, 2013|Gold & Silver Commentary|

About the Author:

Jason Hamlin is the founder of Gold Stock Bull and has been investing in precious metals for over 20 years. Jason spent nearly a decade in analytics for the world’s largest market research firm, before finding success investing full time. He launched Gold Stock Bull in 2005 and turned his focus from helping fortune 500 companies to helping individual investors. Jason is a student of Austrian economics and a proponent of cryptocurrencies such at bitcoin.