It's ok if you agreed to it, no? If you don't like the terms, choose another service instead. That's the free market..
What if a bakery sells poisoned bread because it is in their ToS so "both parties agreed" and "it's a free market"? What if you buy clothes from a clothes shop and they tell you "Well, we took your money now but we'll give you nothing, bye. This rule was stated in our ToS". Free market, no? Following your logic any business can put in their ToS "We can scam you" and just take your money. And then goes "both parties agreed" and "free market". Add to this they put their ToS under the carpet in their shop so you didn't see it so "both parties agreed"
I stay for the free market too. But exists a common sense. You can't just put in ToS "I have a right to scam customers" then scam them and tell it's okay because it's in ToS. I mean, technically you can, you can write it in your ToS. But it wouldn't be ok and you would be a scammer.
It looks absurd to me, which is why I always advocate for
https://bisq.network/ for any larger sum of money (and against any centralized exchange in general).
'clients don't read ToS' is a non-argument. In most countries,
'Ignorantia juris non excusat' is a commonly known law, i.e. if you don't know the law or in this case, terms of service, it's your fault and doesn't protect you from punishment. It is your duty to be aware of all terms and conditions before using a service.
It is not their duty to show this information during an exchange. Just like Facebook doesn't have a message next to the 'Post' button about all the evil and wicked ways in which this data you're about to post, will be mined, linked, used and archived forever + sold to everyone who pays them. Of course it doesn't, because it would fill up the whole screen.
"We have a right to scam you" - look how short, fits any screen perfectly, doesn't need much space
The problem is nobody expects an exchanger to have a right to scam customers stated in a ToS. Because this is against common sense. And it's completely normal people don't expect rules like this. Vice versa it would be very strange if people expected something like that and searched for that in someone's ToS. Again, when you go to a clothes shop do you have an idea you should read their ToS to check if the shop has a right to scam you? No, because this is just crazy. So you are telling we shouldn't use common sense when dealing with exchangers and should expect anything to happen and to be in ToS. So we can expect for example "Our exchanger will ask you for your nude photos" or "Our exchanger will ask you to cut your ear and send to us". Following your logic if it's in ToS it's ok and should be expected. Doesn't matter what it is.
Clients aren't forced to use the service, though. It goes either way.
Of course, that's why I said above if clients were informed they never would use such service. You won't use a bakery that is selling poisoned bread. But if you haven't seen other customers dead after eating this bread you would never have in mind "our bakery puts poison to bread" can be in ToS. And you're not supposed to. Because it's ok not to expect crazy things to be there. What is not ok is to have such crazy things in ToS. So if a baker sells poisoned bread I don't think "just don't buy from him" works in this case. I think the baker shouldn't be surprised when some day someone cracks his head. It would be logical and fair.
And I will inform people about scammer exchangers and will report these exchangers everywhere I can. "Just don't use" doesn't work for me in this case, I won't just observe scam happening daily and think "Oh, it's in ToS so it's ok".
It's not really illegal, they can have their own terms and change them at any time, and I am not defending anyone here, just stating the fact.
If you examine what was happening with centralized exchanges, lending platforms and some gambling website, they did hold ands seized coins of their customers many times.
Yes it is illegal. They can't have any ToS they want. Technically they can but it would be against the law. The law tells only financial organizations can perform KYC checks and seize funds. Can't believe I must explain why one physical person can't seize funds of another physical person. If you think so I want to seize your funds too, send me some coins please
I'll seize them only to perform check, I promise. Exchangers aren't police, aren't banks. You agree only police has the right to detain you, don't you? Same thing for seizing funds. Anonymous person from internet can't do this just because he or she wrote it in their ToS. Having such rules in ToS doesn't make it ok.