Topic: Cloudbet last scam accusation, what do you think? (Read 639 times)

Well the only reasonable step from the casinos is to tell when they will ask KYC, Sportsbet clearly states that it will ask KYC for any amount being larger than 0.10 BTC and if you read their term and conditions you have to abide by that or stop playing. Don't know Cloudbet terms and conditions but it is time we all start reading them before joining any casino to save ourselves the trouble of KYC later on.

Hello,

Law student, and BTC crypto gambler here. I want to chime in and add some formal input to this discussion.

The following will be analysed;

1. Cloudbet.com's overall conduct and the reasoning behind their actions.
1. The ethicality of the KYC process that online gaming/casino companies initiate post-deposit.
2. The legal implications of engaging in potentially illicit business activities and potential remedies for affected Cloudbet.com consumers.

The logic and provisions will be taken from Commonwealth Law (vast and far-reaching). I am from a country that practices Commonwealth Law and I am able to access Cloudbet.com.
According to the website, Cloudbet.com is allowed to engage in commercial activity here, this means they have applicable licensing and are considered a commercial entity in this country.

Although simple and quite obvious, step 1 is to determine whether Cloudbet.com has a valid contract between the customer (user) and their business.
Four elements need to be satisfied; Offer and acceptance (agreement), consideration, intention to create legal relations, and certainty and completeness of terms.

Valid contract

• Offer made by Cloudbet.com to through its marketing, sign up process and more (both on and off-site).
• Clicking 'I agree/accept' after a list of standard terms on a website has been regarded as synonymous with the traditional signature; this is included in the sign-up form, thus, offer is accepted.
• The doctrine of consideration requires that something is given in return for a promise in order to make it legally binding. In this case, the end product is the potential winnings of the customer.
• Intention to create legal relations, the consumer and Cloudbet.com must have intended their agreement to be legally enforceable in order for it to be so - obviously satisfied.
• Certainty and Completeness of Terms. A binding contract must be sufficiently complete and sufficiently clear on its terms. I disagree with the language used within Cloudbet.com's T&C.
  An example: Cloudbet.com T&C - Bitcoin Funds (5.3.10)
  "We reserve the right to deduct any incurred costs for deposits from any amount of bitcoin that you withdraw if such costs exceed the net revenue generated by you from the date upon which you first deposit bitcoin with us".
  The term' net revenue' and 'incurred costs' would indicate that the consumer has now become a commercial entity. There are several other examples. However, personal interpretation of that line does not make that section in the T&C void, that's up to the judge. However, Cloudbet.com should consider further developing the language for their T&C, especially when courts will endeavour to attribute meaning to the language used by the parties, it's just good business. My claims can be rebutted, but I think it is necessary to highlight the ambiguity of derived meaning and uncertainties surrounding the language of Cloudbet.com's T&C.

Cloudbet.com's argument

The problem arises when faced with the argument Cloudbet.com is using - Customer violated T&C > Customer is no longer a valid customer > Contractual obligations by Cloudbet.com to the customer is no longer owed, as the customer is no longer a customer, and the contract does not exist. I.e. They are not obligated to pay out the customer as the promise is not contractual and therefore not enforceable.

Promissory Estoppel

However, the arrangement may still be enforceable in equity through the doctrine of promissory estoppel. The doctrine is designed to prevent unjust departure from promises relied upon by others to their detriment.

Relevant case - Legione v Hately(1983) 152 CLR 406

Elements of estoppel
1. The relying party has adopted an assumption;
2. The representor's conduct induced this assumption;
3. The relying party will suffer detriment in reliance on the assumption

There are also subpoints; the relying party's reliance must be reasonable; the representor's departure from the assumption they created must be unconscionable.

• The first element is satisfied due to the vast history of gambling/online gambling and the large player base that Cloudbet.com has (this is not a fancy new tech product or a perishable good).
• The second element is satisfied as Cloudbet.com heavily encourages consumers to make unlimited deposits through its platform and does not give adequate notice to customers regarding the KYC withdrawal process and payout barriers.
• The third element is also satisfied as the customer (Swofty for instance) suffers real-world monetary losses, due to the reliance on the payout assumption.
  

For the layman - Due to the reliance of the individual on the assumption that they will be paid out (GINALLI-ANTONIOO, Swofty, Kraac and more.) and Cloudbet.com's potentially unreasonable actions (court decides), they suffer a monetary loss. In the Commonwealth (which is vast and far-reaching), through precedent and statistics alone, it is unlikely that the court would favour Cloudbet.com's position - especially with high-value cases like Swofty.

Effect of an equitable estoppel:

Equitable estoppel raises an ‘equity’ in favour of the relying party i.e. an entitlement to equitable relief, which is determined at the court’s discretion (this could be more or less than the total balance of affected customers). Court determines the ‘minimum equity’ to remedy the loss suffered by the plaintiff i.e. the minimum necessary to prevent detriment being suffered by the relying party as a result of their reliance.

Cloudbet.com's unconscionable conduct
When reviewing all the short-term outcomes and general conduct (except for email etiquette between front-line support and customers as its influence is minor in comparison to other actions undertaken by Cloudbet.com)
the argument can be made that Cloudbet.com has used its commercial status and financial advantage as an abuse of power.

The doctrine of unconscionable conduct
1. The weaker party is under a special disability/disadvantage in comparison with the stronger party (disability/disadvantage)
2. The stronger party is aware of the special disability/disadvantage (awareness)
3. The stronger party took advantage of the weaker party’s special disability/disadvantage to obtain a benefit in circumstances where the transaction was not fair, just and reasonable (unconscientious advantage)

• Element one is satisfied, Cloudbet.com has the financial advantage.
• Cloudbet.com has demonstrated awareness of customers and their weaknesses through their actions.
• Cloudbet.com took advantage of the customers' disadvantage and proceeded with unreasonable actions.

KYC process and hidden barriers of withdrawal
Conversions are crucial to online businesses' success and bottom-line. Hence, this is why Cloudbet.com engages in heavy promotion and ensuring that the workflow (every-single button click, to the sign-up form, to language and more.) to a deposit is fast and straightforward.

Other FIAT based casino's that accept deposits usually employ 3D Secure. This is to prevent friendly fraudulent chargebacks (user loses $100, proceeds to claim he lost his card and the spending of $100 was actually committed by someone else. Financial institutions like banks have a history of siding with their customers) from occurring by verifying the user's identity through a linked mobile number SMS (2FA essentially).
Depositing with Cloudbet.com is entirely BTC/BCH only, this means that besides a formal KYC process, there is no way to pre-emptively prevent a US-based/*banned country*-based transaction through their system with the exception of GEO-locking IPs to allowed regions.

Cloudbet.com can argue that conversions are important and engaging in the KYC process pre-deposit can be harmful to their bottom line. It is. It will be. However, although Cloudbet.com does not exclude its terms of deposit/withdrawal, they do not provide or deliver adequate notices of such withdrawal barriers to customers/potential customers.

Incorporation of terms by notice
Whether terms are incorporated depends upon 2 things:
1. Were the displayed/delivered terms available to the party to be bound prior to the contract being made?
2. Were reasonable steps taken to bring the terms to the notice of the party to be bound? (party must have actual knowledge or notice of the terms)

An example is a prominent sign with terms displayed clearly at the entrance of a carpark. When a car enters the carpark with a receipt of the ticket, a contract is formed (refer to elements of contract formation above). A liability shift occurs between the customer (car owner) and the carpark (business). If your car is stolen or damaged and the carpark has provided due diligence, (security, camera's and fencing etc.) their liability is limited.

Cloudbet.com has failed to provide adequate notice, hence liability shift cannot occur.

I know this more than anyone. A customer/potential customer of Cloudbet.com will reasonably expect that to withdraw freely. This is especially relevant to new users who are entering online gambling for the first time and are not used to the mechanics of online gambling. Cloudbet.com may very well be their first interaction with online casino's/gambling. It is reasonable for a Cloudbet.com customer to expect an unhindered withdrawal, not unlike their unhindered deposit process.

The ethical dilemma

Example scenario:
You work at a large corporation that requires a criminal background check for all new customers, which takes approximately 24 hours from the time an order is placed.
You have the opportunity to close a lucrative deal with a potential long-term customer if you agree to ship the products overnight, even though that means the required check will have to be done after the fact.

This is very similar to the conflict between Cloudbet.com and customers. This kind of dilemmas and issues fall squarely in the domain of ethics. How would you handle the above situation? I urge Cloudbet employees/management reading this to try and answer this question internally.

Most ethical dilemmas involve a conflict between the needs of the part and the needs of the whole – the individual against the company or the company against society (all customers) as a whole.
For example, should Cloudbet.com install clear signage to notify customers of the KYC process and withdrawal barriers which may benefit customers as a whole but reduce the conversion rate?

Sometimes ethical decisions entail a conflict between two groups; should the potential for local health problems resulting from a company’s effluent take precedence over the jobs it creates as the town’s leading employer?

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There are a hundred more applicable statutes, torts and cases that can be applied to Cloudbet.com and their questionable management decisions.
I do not personally use Cloudbet.com, I haven't played on their website before. This is merely a study of unfortunate circumstances.

I hope this incites constructive discussion as unfair business practices by large corporations against consumers is an age-old tragedy.

Personally, I think it looks very "scammy" when an online service is more than happy to take your money "no questions asked"... then does a "180" and starts asking for all sorts of verification as soon as you try to withdraw your money.

I understand the commercial downsides to a crypto-related business asking for KYC "upfront"... they'll be shooting themselves in the foot as users will just move on to the next service that doesn't require KYC to deposit (but may or may not play the card at withdrawal time). But at the very least, they should be "upfront" about the fact that it is likely you will need to provide KYC if you need to withdraw "large" sums (over some stated threshold). Surely it can't be that hard to include it in the T's&C's when a user is signing up?

I would likely have more respect for a service that was open and honest in this regard... rather than springing requirements on you at the last moment!

In any case, it probably won't stop users complaining... look at the large exchanges, they're generally pretty open about the fact that you will need to complete KYC to withdraw over a certain threshold... and users are always bitching about it.

there is no point stating the obvious, second line in the OP states that the issue has been resolved, this is not the purpose of the topic, it's a matter of whether the community thinks that it's okay to play the KYC game only after the player wins.

It’s been resolved, Swofty wasn’t who he said he was so Cloudbet were justified to ask questions. He was using somebody else’s ID. It was all a big mess but thankfully now it’s resolved.

The answer is simple, if they accepted his 129 BTC and bets without checking anything, then they have to pay out his balance.

If they checked his identity / location prior to accepting his 129 BTC and bets and he submitted manipulated documents, then the casino indeed has the right to confiscate the account balance.

However, the story could be indeed fabricated, because usually no one playing illegally deposits 129 BTC at once!

I get worn out defending myself against the bullshit that other DT members let slide; if this was happening right now, you'd probably not hear any input from me let alone see me lead the charge. Once I recharge again, maybe. But there is another problem (see last quote of this post).

We never really got any detailed information other than a little bit at the end.

KYC verification at time of registration would solve such problems. But I don't think it's going to happen in crypto casinos, mainly because there aren't enough regulations in this market. People who use crypto casinos usually prefer to stay anonymous. And if one casinos would implement KYC at the time of registration, they would lose lot of potential customers. They would just move to another casino where they would be to game anonymously.
And gambling market is shady thing in general, no matter it's fiat or crypto. You can deposit large amount of money and lose it without any issues. But if you will win bigger amount of money - prepare for problems. Casino will start investigations to find that maybe you did break their TOS and prevent your from cashing out your winning. This case isn't exceptional, maybe only huge amount of money here is exceptional.

They would have already answered it if they wanted to 

I am too old to lead such a battle  , plus i lack experience and immunity against everything mentioned above. and based on my tiny tittle experience in this forum you seem to fit best for such task, after all the B.S against you, you still going strong, i am sure the KYC battle will be a piece of cake for you.



I am curious too, if you happen to get an answer from Cloudbet, please let me know !

They don't do it exactly because there is no requirement for them to do it. I don't think I've seen a single site that has this laid out somewhere?

I'm sure you can fight your own battles, besides I won't side with either party because of all the usual leftist bullshit #bias, #abuse, #harassment, #thinkOfTheChildren, #FjShill.  

This will suffice, and for obvious reasons, they will never do this unless they are somehow forced to it. and i think this is the main point of this topic.

and if the community does feel the need for such clarification regarding  KYC from casinos that use the forum to advertise their services, then i expect and old member like you to lead the battle 

Wrong. You are mixing up normal vs. irregular situations. Once you hit some random trigger, you may be asked for extra KYC even if you are fully verified already. The best you could ask for is that Casino's clarify in what cases KYC would be requested. Other than that I see this witch-hunt leading nowhere unless you want to go after every single exchange as well (some other services probably apply too) and in that case I wish you best-of luck.

I'll just drop this here to not repeat it again https://bitcointalksearch.org/topic/m.49841819.

Why not asking documents then? What has changed between these withdrawals and why location all of sudden become important while it wasn't before?

most known exchanges, make things quite clear.

Take Binance for an example , they literally tell you that if you decide to withdrawal anything above 2BTC per day, you will need to provide a,b,c documents.

most other exchanges have a similar thing, and it's pretty different from what Cloudbet do, comparing these two completely different things is not very logical.


indeed, this is the least they should do. i did skim through their terms and conditions and i failed to see anything clearly stated at all.
  

I agree with you, but I don't doubt the reasoning behind casinos' request of documents for payout.  I'm an American so I'll put things into IRS terms:  If i can't prove that I paid $xxx.xx out, then I'm liable for taxes on $xxx.xx as income.  Proof is in the form of documents that require personal information about the payee.

What I would like to see is a very hard to ignore notification on the casino's membership initiation page informing their clients that KYC is not needed for using the site, but payouts greater than x amount require KYC.  I know it's probably buried in the fine print of the TOS, but making clear and unambiguous would greatly reduce these types of scam claims.  

There is definitely an ethical dilemma with accepting money no questions asked and only giving it back after seeing personal documents.  Imagine an escrow agent doing something like that.

So every time an exchange asks me for documents to withdraw, I'm being extorted? Keep in mind that you don't get asked anything for deposits/withdrawals under certain amounts (or unless something triggers alarms). I have issues following this logic.

I think it's telling that they will ask for KYC once a withdrawal is requested, but not when a deposit is made.  If they were to ask for KYC upfront, I imagine they would have far fewer clients.  



This made me chuckle, if their ethics weren't dubious they likely wouldn't be in the casino business to begin with.  I'm sure most casinos are not likely to care if their clients adhere to the TOS if those clients keep losing money.  Once a client wants to claim a prize, that's when the TOS become tantamount to gospel.

I'm not trying to disparage casinos or their owners.  As long as they are operated as legitimate businesses and don't attempt to scam their clients, I believe they should have every right to exist.  I think it's great that the forum allows them as well.

but we do tag account sellers , and i assume they are more in number than the casinos ? if we all agree that the casinos are performing unethical behavior that could even be considered scam or at least extortion - why shouldn't they be tagged?

technically, Cloudbet extorted documents from Swofty and refused to pay him the initial deposit until the extortion was finished.

it's really funny that Cloudbet now have a positive trust score after all that.