But with nobody regulating them some exchanges can do dirty dealing. That is the whole point of regulation. To try and make sure people are not cheated.
But did our governments has good understanding on how cryptocurrencies works and some of them did not have good faith on bitcoin regulations and what we have now is far better than when government start to regulate it. Exchange platform are really making a lot of cheating in dealing with our transaction and I think we should not do thinks that is going to affect cryptocurrencies out of greed and selfishness. Exchange platforms has a lot of saying in the development of cryptocurrencies and there are stakeholders in it. 
Topic: How exchanges steal our money - page 2. (Read 574 times)
Haven't faced any issues with the exchanges, one thing that made me more careful in the cryptocurrency industry was the cheating done by an wallet service. Bit.ac was a wallet service provider, suddenly it went away cheating more users and I've got more than 0.2btc into the wallet.
I take these words as sarcasm, because any exchange and exchanger has good earnings thanks to users. and I can assure you that the more the user's pocket, the greater the percentage for the Exchange Administration.
They probably weren't. We all know service providers charge fees to end users because the world isn't a charity, and everyone gets that. What the OP is describing is that they're making money using your money, without your knowledge. You don't technically lose anything, but it could be considered shady because of the manner in which it was done.
So, are there some exchanges that have actually been caught doing these, or are these just possibilities?
Oh gosh, they make money? !!? I thought it was a service to the good of mankind. 
So yes, when i buy coin at 0.0341 i might be buying from exchange who brought from someone at 0.0340. I got my price, he got his price, if we do market orders we dont care about precise price. What exact is the point of this revelation? We close exchanges?
So yes, when i buy coin at 0.0341 i might be buying from exchange who brought from someone at 0.0340. I got my price, he got his price, if we do market orders we dont care about precise price. What exact is the point of this revelation? We close exchanges?
It may not look like a big deal until you send a really big order and then things get real nasty. And they get even nastier when you send a market order which means that you give the exchange a full leeway to do whatever they want with the price and go at the double where their greed leads them. In short, it is not as innocent as it seems to you. The point is if you are a person with deep pockets, you should be aware and beware of how exchanges want to make money off you in a way that you don't even suspect. Will you be happy to find out that someone is making money at your expense? I don't think you would.
Oh gosh, they make money? !!? I thought it was a service to the good of mankind.
So yes, when i buy coin at 0.0341 i might be buying from exchange who brought from someone at 0.0340. I got my price, he got his price, if we do market orders we dont care about precise price. What exact is the point of this revelation? We close exchanges?
So yes, when i buy coin at 0.0341 i might be buying from exchange who brought from someone at 0.0340. I got my price, he got his price, if we do market orders we dont care about precise price. What exact is the point of this revelation? We close exchanges?
It may not look like a big deal until you send a really big order and then things get real nasty. And they get even nastier when you send a market order which means that you give the exchange a full leeway to do whatever they want with the price and go at the double where their greed leads them. In short, it is not as innocent as it seems to you. The point is if you are a person with deep pockets, you should be aware and beware of how exchanges want to make money off you in a way that you don't even suspect. Will you be happy to find out that someone is making money at your expense? I don't think you would.
#1 and #2 below are the exact same activity you're accusing the Exchanges of committing - delaying trades.
I wouldn't call these dirty tricks, it's a benefit of making the market. What keeps these exchanges in check with this activity is the competition coming from other exchanges. If I see a better price on another exchange I'm going to go to the competition.
Exchanges are allowed to make the spread, that's how they make money. By fulfilling Bitcoin (or insert cryptocurrency/investment) buy orders for more than the sell orders. It's not stealing, it's literally how they make money. It's nearly no different than a bank loaning out money at a higher interest rate than they pay for savings.
1. Exchange sees a big sell or buy order entering the system which would fill a lot of orders in the orderbook at prices higher or below the price set by the trader. In this case, exchange can itself sell or buy all these orders first and then fill the entering order at its specific price. The effect is that the exchange earns profit while the trader gets his order filled at maximum or minimum possible price. This method works exceptionally well with market orders filled at the current market price. Guess what price it will be.
2. Exchange can set arbitrary delays while adding new orders. For example, WEX (former Btc-e) officially sets a 2 second delay within which a trader doesn't know what's going on at the exchange. In this case, if exchange sees a big order, it can delay adding it waiting for another big order to arrive. If these orders are offsetting each other, exchange can then fill them itself and put the spread in the pocket. This approach works particularly well with exchanges that have lots of liquidity.
If you know of other dirty tricks that exchanges use, share them here.
2. Exchange can set arbitrary delays while adding new orders. For example, WEX (former Btc-e) officially sets a 2 second delay within which a trader doesn't know what's going on at the exchange. In this case, if exchange sees a big order, it can delay adding it waiting for another big order to arrive. If these orders are offsetting each other, exchange can then fill them itself and put the spread in the pocket. This approach works particularly well with exchanges that have lots of liquidity.
If you know of other dirty tricks that exchanges use, share them here.
I wouldn't call these dirty tricks, it's a benefit of making the market. What keeps these exchanges in check with this activity is the competition coming from other exchanges. If I see a better price on another exchange I'm going to go to the competition.
Exchanges are allowed to make the spread, that's how they make money. By fulfilling Bitcoin (or insert cryptocurrency/investment) buy orders for more than the sell orders. It's not stealing, it's literally how they make money. It's nearly no different than a bank loaning out money at a higher interest rate than they pay for savings.
Another method i've ran into myself lately and hear about increasingly is freezing withdrawals.
You create an account, get verified, all is cool, you deposit and trade a bit, all is cool.
You decide to withdraw.
Withdrawal gets put on hold.
You'll be asked for additional verification documents and selfies.
Once you provide this they will reply they need to know the exact source of the funds you deposited to them and your intentions of the crypto you're going to withdraw.
They ask this in such detail that it is nearly impossible to provide, screenshots of wallets are demanded, links to every transaction on the blockchain that is related to those funds, you'll be asked to show how you got this crypto in the first place with bank statements or screenshots of mining pools.
It is absolutely ridiculous and criminal.
This scenario happened to me with both Bitstamp and HitBTC.
It's been months and i've been unable to get my funds out after countless email and support tickets.
You create an account, get verified, all is cool, you deposit and trade a bit, all is cool.
You decide to withdraw.
Withdrawal gets put on hold.
You'll be asked for additional verification documents and selfies.
Once you provide this they will reply they need to know the exact source of the funds you deposited to them and your intentions of the crypto you're going to withdraw.
They ask this in such detail that it is nearly impossible to provide, screenshots of wallets are demanded, links to every transaction on the blockchain that is related to those funds, you'll be asked to show how you got this crypto in the first place with bank statements or screenshots of mining pools.
It is absolutely ridiculous and criminal.
This scenario happened to me with both Bitstamp and HitBTC.
It's been months and i've been unable to get my funds out after countless email and support tickets.
If I understand correctly, you're basically saying that instead of processing orders in the order they come in, exchanges are processing them in such an order where they will make the most amount of profit, and could use delays to this end?
No, I don't mean that. Out of order execution is out of limits even for crypto exchanges, though where it happens, and it does happen here and there, it may in fact be due to bugs in a trading engine rather than malicious intent. I know that at Bter, a Chinese exchange that was active a couple or so years ago, you could fool their trading engine and get your orders executed before anyone else's in the same queue. Obviously, this is an unfair advantage. But there is nothing fair in what I speak about in OP either. Honestly, I don't understand why some people here consider this or similar practices kind of normal. Regular exchanges get severely punished if they get caught doing such things.
I don't think that exchanges steal our money, because they earning big money on their fee. They have fee when you sell , buy and withdraw money. Some exchange even have fee when you deposit bitcoin , that is really bad in my opinion, so before you open account on exchange first read about Fees.
People are good at complaining about centralized services, which in some cases is well justified, but in some cases also not. Believe me, I have seen a lot shady stuff happen on various altcoin exchanges throughout the years, but I kept using them regardless of that, and so are other people. I partly agree with OP even though it can't really be considered theft in my opinion, and others in this thread seem to believe so too. The point is that with how people are so dependent on these centralized exchanges, they will continue to swallow everything as long as it isn't forming a major obstacle for themselves. It basically means that an exchange will continue to behave in a certain way without people actually complaining or taking strong action. If you do something even remotely wrong, and no one points you to your wrongdoings, you'll continue your usual path....
Oh gosh, they make money? !!? I thought it was a service to the good of mankind.
So yes, when i buy coin at 0.0341 i might be buying from exchange who brought from someone at 0.0340. I got my price, he got his price, if we do market orders we dont care about precise price. What exact is the point of this revelation? We close exchanges?
So yes, when i buy coin at 0.0341 i might be buying from exchange who brought from someone at 0.0340. I got my price, he got his price, if we do market orders we dont care about precise price. What exact is the point of this revelation? We close exchanges?
Anyone who trades or makes use of exchange and don't know that most exchange does dirty tricks to get more money from users aside their regular gain is still learning. Aside the two you mentioned above, the one that hurts me more is that sometimes some hacks that do happen in some exchanges might have the tendency of been done by their owners. This is all greediness and unfair.
What you are saying isnt something unknown neither it is shady enough to say that exchanges steal your coins. Each exchange has certain working strategy, 2 second delay sometimes might even not be intentional but something the api needs to list the order.
No, it is not just about listing the orders. 2 second delay at WEX is the clock tick at which data is refreshed. It means that if you are using their API to access trading data, you will be querying cashed data. Obviously, it is claimed that the purpose is to lower load on exchange servers but as a side effect, you don't know what's actually going on at the exchange for the next 2 seconds after you receive refreshed information. But 2 seconds is a huge amount of time within which a lot of things can happen.
We cannot know this if no one regulating them, this might be true or not but its their business and we have no choice but to use it anyway, they make money through fees or even in that way but as long as my funds are safe there I will keep my mouth shout because I am using some exchanges smoothly and hopefully they can go even better.
If I understand correctly, you're basically saying that instead of processing orders in the order they come in, exchanges are processing them in such an order where they will make the most amount of profit, and could use delays to this end?
I guess it could be said that it's shady behavior, but you could just as easily say it's good business sense. Wouldn't it also be considered nothing in the grand scheme of things because we're only talking about manipulating (using the term very loosely here) transactions made within literally a couple of seconds within each other?
I might have totally misunderstood what you were saying, but that's my two satoshis anyway lol.
It's not that I absolutely trust in exchanges either. You never know which one will have a "hacking" incident, and whether they're legit or not. Someone's definitely stealing your money either way, and exchanges are involved one way or another.
I guess it could be said that it's shady behavior, but you could just as easily say it's good business sense. Wouldn't it also be considered nothing in the grand scheme of things because we're only talking about manipulating (using the term very loosely here) transactions made within literally a couple of seconds within each other?
I might have totally misunderstood what you were saying, but that's my two satoshis anyway lol.
It's not that I absolutely trust in exchanges either. You never know which one will have a "hacking" incident, and whether they're legit or not. Someone's definitely stealing your money either way, and exchanges are involved one way or another.
While your accusations may not apply to certain exchanges, I think it could well happen. It's definitely doable for an exchange, almost undetectable and very profitable if they can do these on a consistent basis on this volatile market.
I think that the main issue with exchanges right now is still the fact that people are storing funds on them.
Most likely, exchanges are investing in stuff that they don't tell their customers about or even just using their money somewhere else to do stuff for the owner's benefit.
Many exchanges may be insolvent due to fractional reserve, and that's a huge way that exchanges are essentially watering down the coins you store on their site.
I think that the main issue with exchanges right now is still the fact that people are storing funds on them.
Most likely, exchanges are investing in stuff that they don't tell their customers about or even just using their money somewhere else to do stuff for the owner's benefit.
Many exchanges may be insolvent due to fractional reserve, and that's a huge way that exchanges are essentially watering down the coins you store on their site.
They charge fees during trading and there are so many trades they earn a lot but they also charge a very high fees for withdrawal. So every time you withdraw money you can giving it to exchanges.
How exchanges steal our money?
They do it with fees. More we trade, fatter they get. When price of coin increase and transactions fees decrease, exchanges are super slow oto reduce their withdrawing fees and keep them high as long as they can. Some exchanges like HitBTC even takes fee when you deposit coins there.
I don't understand why you consider this to be theft. Exchanges have always had a difference between buying and selling prices ( the spread ). Banks do it with fiat transactions, and they often charge an additional commission on the trrade.
Maybe, because front running, which the tricks mentioned here fall under, is considered unethical practice in any trading environment? Obviously, it gives an undeserved advantage to some market players, in this case to exchanges, but in trading such advantage always means money, money lost and earned, if it can called that. Which, if you ask me, is not very far from stealing. Anyway, front running is officially prohibited on any major regulated exchange, and the exchanges that get caught suffer severe penalties. Not that it prevents them from further attempts at secretly deceiving their clients whenever possible but still.
Weird but inevitable how much power we've chosen to award exchanges. We plead with them to ignore or embrace our forks and shitcoins. We plead with them to be good actors when filling up the Blockchain.
All the while almost nothing is known about the management, ownership and health of many of them, let alone their honesty.
In our rush to get rid of 'banksters' we've enriched and legitimised organisations run by amateurs, criminals and assholes often with zero regulation. If they ever got within reach of banking riches the crypto scene would be even more disgusting than it is right now.
It's one of the major barometers of crypto's real progress towards making a better world. Right now it's looking fairly samey.
All the while almost nothing is known about the management, ownership and health of many of them, let alone their honesty.
In our rush to get rid of 'banksters' we've enriched and legitimised organisations run by amateurs, criminals and assholes often with zero regulation. If they ever got within reach of banking riches the crypto scene would be even more disgusting than it is right now.
It's one of the major barometers of crypto's real progress towards making a better world. Right now it's looking fairly samey.
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