What could make an exchange to seize users assets

Alpha Marine

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Quote from: KingsDen on June 15, 2023, 03:23:59 PM

But I still have my doubts. Why should an exchange reject a coin or frustrate it's flow knowing so well they will make money from the movement or trading of the coin?

It's not like the exchange really cares, but they're bound by regulations most times. They are on a thin line and any mistake they make regulatory bodies will be coming in hot. So they do things like this to take pressure off of them a bit.
I know a guy that Binance seized the coins in his account because he used his account to receive money that turned out to be gotten through fraud. They froze his account and reported him to the authorities.

Quote from: o_e_l_e_o on June 20, 2023, 07:46:34 AM

Quote from: Synchronice on June 20, 2023, 05:47:53 AM

By the way, isn't it illegal to take away someone's money without his permission?

All Coinbase have to say is that your coins triggered some secret algorithm which made them suspect theft, money laundering, darknet use, gambling (in some jurisdictions), or some other use your government dislikes, and not only does it become legal for them to seize your coins, but it becomes actively encouraged by your government.

Damn! It just keeps getting scarier.
But is there a way to prove that what they (coinbase) are saying is not true?

rat03gopoh

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Quote from: Synchronice on June 20, 2023, 08:07:24 AM

Btw it's very interesting to know if anyone here become a victim of a data leak (taken loan, etc) and hired a good lawyer and won the case. I can't find similar accidents. It's really very interesting because 1 part (government) pushes you to submit KYC to 2nd part (exchange for example) and this 2nd part leaks your data and you experience financial loss. Logically, you are a victim of these two and it's interesting to know how does the judge looks at this case.

The government can't and doesn't want to be blamed for this. When KYC laws are made, ' also automatically provide a set of identity protection laws for users that service providers must then implement.
I think these services don't expect data leaks for the sake of their business continuity. But they can't predict how it will happen, let alone identify their employees who will do it. However, most of the data leak cases that I've heard of, it won't be until the shutdown of the service, only the parties involved (individually) will be brought to justice.

o_e_l_e_o

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Quote from: Synchronice on June 20, 2023, 08:07:24 AM

Imagine that 60% of Ireland's population (The current population of Ireland is 5 million people) is registered and KYC verified on Coinbase and one day there is a data breach, boom, KYC documents of 60% of Irish people is publicly available. Isn't that a national security threat?

A nation-state level attack does not need the identity of 60% of the population - the identity of a small handful of the right people is more than enough to pose a national security threat. The protections against such an attack are from the final destination not being fooled by the false identity - it is already far too late to prevent the leakage of KYC data. But the vast majority of attacks are not from nation-states looking to compromise national security, but from individuals looking to take out $200,000 in your name.

Quote from: Who is John Galt? on June 20, 2023, 10:41:01 AM

I already mentioned in another topic that, according to Britannica, in 2021 alone, 42 million Americans (more than 12.5% of the country's population) were victims of identity theft, the total loss was then $52 billion.

That matches the data I shared in this post: https://bitcointalksearch.org/topic/m.62337285

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Quote from: Synchronice on June 20, 2023, 08:07:24 AM

Imagine that 60% of Ireland's population (The current population of Ireland is 5 million people) is registered and KYC verified on Coinbase and one day there is a data breach, boom, KYC documents of 60% of Irish people is publicly available. Isn't that a national security threat?
It's also a national threat for the USA that its citizens are uploading their KYC data on Binance?

Corporations leak user data on a massive scale. Wikipedia's list includes 33 different leaks over the past 15 years, in which data from 100 million or more users was compromised alone. Another 58 records of data loss from 10 to 100 million. The top 5 leaks affected data from half a billion to 3 billion users each. And all these corporations still continue to work, although some of them are marked on the list more than once. You can draw your own conclusions about whether such leaks are a national threat in fact or not. But it is always better to take care of your own information security on your own.

I already mentioned in another topic that, according to Britannica, in 2021 alone, 42 million Americans (more than 12.5% of the country's population) were victims of identity theft, the total loss was then $52 billion. It is very risky to go through KYC thoughtlessly wherever they ask for it.

Synchronice

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Quote from: o_e_l_e_o on June 20, 2023, 07:46:34 AM

Quote from: Synchronice on June 20, 2023, 05:47:53 AM

I sometimes think about this and can't understand, why do governments push exchanges or any other services to gain KYC documents of their customers. Isn't it a national threat for governments that random exchanges collect KYC documents of their citizens? Especially when there are so many KYC data leak accidents.

An attacker with your details can ruin your life, commit fraud in your name, take out loans and credit in your name, but the government don't give a shit about any of that. That's not a national security threat, just a personal threat, and your government does not care about you. Plus the government can then tell that exchange to hand over all your financial activity which they can definitively link to your real identity. No government in the world would pass up on this kind of freely given mass surveillance.

Imagine that 60% of Ireland's population (The current population of Ireland is 5 million people) is registered and KYC verified on Coinbase and one day there is a data breach, boom, KYC documents of 60% of Irish people is publicly available. Isn't that a national security threat?
It's also a national threat for the USA that its citizens are uploading their KYC data on Binance?

Btw it's very interesting to know if anyone here become a victim of a data leak (taken loan, etc) and hired a good lawyer and won the case. I can't find similar accidents. It's really very interesting because 1 part (government) pushes you to submit KYC to 2nd part (exchange for example) and this 2nd part leaks your data and you experience financial loss. Logically, you are a victim of these two and it's interesting to know how does the judge looks at this case.

o_e_l_e_o

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Quote from: Synchronice on June 20, 2023, 05:47:53 AM

By the way, isn't it illegal to take away someone's money without his permission?

All Coinbase have to say is that your coins triggered some secret algorithm which made them suspect theft, money laundering, darknet use, gambling (in some jurisdictions), or some other use your government dislikes, and not only does it become legal for them to seize your coins, but it becomes actively encouraged by your government.

Quote from: Synchronice on June 20, 2023, 05:47:53 AM

I sometimes think about this and can't understand, why do governments push exchanges or any other services to gain KYC documents of their customers. Isn't it a national threat for governments that random exchanges collect KYC documents of their citizens? Especially when there are so many KYC data leak accidents.

An attacker with your details can ruin your life, commit fraud in your name, take out loans and credit in your name, but the government don't give a shit about any of that. That's not a national security threat, just a personal threat, and your government does not care about you. Plus the government can then tell that exchange to hand over all your financial activity which they can definitively link to your real identity. No government in the world would pass up on this kind of freely given mass surveillance.

Synchronice

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Quote from: o_e_l_e_o on June 16, 2023, 04:01:17 AM

Quote from: Synchronice on June 15, 2023, 10:33:27 AM

When you create a company like Coinbase, can you legally include everything the way you want in Terms of Service? I mean, if I create a company in the USA and write in its ToS that by clicking on Agree, this user confirms that she will be my slave and do whatever I ask her to do? Can I legally write that?

You can write it, but it will be unenforceable because it is illegal. However, there is no law saying centralized exchanges cannot freeze accounts or confiscate coins, and indeed this behavior is often supported or even required by various governments.

By the way, isn't it illegal to take away someone's money without his permission? That's their ToS, actually. Legally, there should be a confirmation from both sides to keep money but Coinbase says that they can keep it without your permission with no further explanation.
I sometimes think about this and can't understand, why do governments push exchanges or any other services to gain KYC documents of their customers. Isn't it a national threat for governments that random exchanges collect KYC documents of their citizens? Especially when there are so many KYC data leak accidents.

Who is John Galt?

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Quote from: KingsDen on June 17, 2023, 04:46:18 PM

It might not be a global conspiracy but the conspiracy is jurisdictional and the exchanges and the government on one side vs the customers and bitcoin on the other side.

That's right, unfortunately, as soon as the money gets into a centralized organization, users immediately find themselves in a disadvantaged position. And the government not only takes a side of a centralized organization in disputes, but passes numerous laws to encourage users to deposit their money in centralized organizations, as well as to reduce the use of decentralized forms of money like cash or bitcoin.

KingsDen

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Quote from: o_e_l_e_o on June 16, 2023, 04:01:17 AM

Quote from: KingsDen on June 15, 2023, 03:23:59 PM

Why should an exchange reject a coin or frustrate it's flow knowing so well they will make money from the movement or trading of the coin?

To stay in the good books of the government of the jurisdiction they are operating in. They might lose profit from that user (unless of course they just seize the coins and keep them for themselves), but that's preferable to being sanctioned or shutdown.

To stay in the good books of the government is the best answer, and thanks for this and as you stated above, if the exchanges are I'm the side of the government, freezing a user's coins out of millions will in either way be a win situation for the exchange.

Quote from: Who is John Galt? on June 16, 2023, 07:32:02 AM

This is not a global conspiracy. There is also the influence of governments who want to have the same control over bitcoin that they have over fiat currencies.

It might not be a global conspiracy but the conspiracy is jurisdictional and the exchanges and the government on one side vs the customers and bitcoin on the other side.

Who is John Galt?

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Quote from: KingsDen on June 15, 2023, 03:23:59 PM

Wow! Another dimension of the story and I never thought or reasoned it from this angle. My idea of the reason exchanges seize or reject their so termed unclean bitcoin is because of the regulations imposed by the government in whose country they operate.
I have long thought that it is the war of the government vs the people and exchange. But right now you are making me believe the exchanges are even the master minders of all these.
But I still have my doubts. Why should an exchange reject a coin or frustrate it's flow knowing so well they will make money from the movement or trading of the coin?

This is not a global conspiracy. There is also the influence of governments who want to have the same control over bitcoin that they have over fiat currencies. And ersatz bitcoins in the accounts of the exchanges allow them to control the bitcoins of those who store them on the exchanges. Therefore, both exchanges and governments are interested in keeping bitcoins on exchanges. The common interest contributes to the fact that they work in the same direction, while without any secret conspiracy, all their motivation is in plain sight.

All ersatz-bitcoins on the accounts of exchanges, banks or any other are inherently fiat. The real bitcoin is only on the bitcoin blockchain.

o_e_l_e_o

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Quote from: Synchronice on June 15, 2023, 10:33:27 AM

When you create a company like Coinbase, can you legally include everything the way you want in Terms of Service? I mean, if I create a company in the USA and write in its ToS that by clicking on Agree, this user confirms that she will be my slave and do whatever I ask her to do? Can I legally write that?

You can write it, but it will be unenforceable because it is illegal. However, there is no law saying centralized exchanges cannot freeze accounts or confiscate coins, and indeed this behavior is often supported or even required by various governments.

Quote from: KingsDen on June 15, 2023, 03:23:59 PM

Why should an exchange reject a coin or frustrate it's flow knowing so well they will make money from the movement or trading of the coin?

To stay in the good books of the government of the jurisdiction they are operating in. They might lose profit from that user (unless of course they just seize the coins and keep them for themselves), but that's preferable to being sanctioned or shutdown.

KingsDen

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Quote from: Who is John Galt? on June 14, 2023, 08:34:23 AM

Quote from: KingsDen on June 13, 2023, 07:31:59 PM

Not your key, Not your coin. They can freeze your fund anytime without your permission.

Since exchanges have begun blocking funds also on the basis of how “clean” they "think" bitcoins are or not, it has become increasingly dangerous to use centralized exchanges. They strive to make users afraid to withdraw funds to their wallets at all, so that later their coins will not be recognized as "dirty". They don't just want to get all our bitcoins and manage them themselves, they want to intimidate users into not wanting to get bitcoins outside of centralized exchanges (where it's not real bitcoins). Real bitcoins are only inside the bitcoin blockchain and nowhere else. And centralized exchanges are trying to gain control over real bitcoins with their division of bitcoins, but they still won’t succeed!

Wow! Another dimension of the story and I never thought or reasoned it from this angle. My idea of the reason exchanges seize or reject their so termed unclean bitcoin is because of the regulations imposed by the government in whose country they operate.
I have long thought that it is the war of the government vs the people and exchange. But right now you are making me believe the exchanges are even the master minders of all these.
But I still have my doubts. Why should an exchange reject a coin or frustrate it's flow knowing so well they will make money from the movement or trading of the coin?

Synchronice

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Quote from: o_e_l_e_o on March 11, 2023, 11:17:29 AM

Quote from: John Abraham on March 11, 2023, 02:07:01 AM

-snip-

While everything you have said is true, Coinbase's policies are far more wide reaching than that. They essentially give Coinbase the ability to close your account and seize your coins for literally any reason at all, and there is nothing you can do about it. For example:

Quote from: https://www.coinbase.com/legal/user_agreement/united_states

6.10. Suspension, Termination, and Cancellation. Coinbase may suspend, restrict, or terminate your access to any or all of the Coinbase Services, and/or deactivate or cancel your Coinbase Account(s), with immediate effect for any reason at its sole discretion and is under no obligation to disclose the details of its decision to take such action with you. You acknowledge that Coinbase's decision to take certain actions, including limiting access to, suspending, or closing your account for any reason in our sole discretion, may be based on confidential criteria that are essential to Coinbase's risk management and security protocols. You agree that Coinbase is under no obligation to disclose the details of its risk management and security procedures to you.

At any time, for any reason, and they won't even tell you why, let alone let you appeal against it.

And as we have seen from several recent court cases and bankruptcy proceedings, the instant coins are deposited to a centralized exchange, then legally speaking those coins belong to the exchange and you have absolutely no claim over them. There are thousands of such users who have had various centralized exchanges simply seize their coins with no explanation ever given.

When you create a company like Coinbase, can you legally include everything the way you want in Terms of Service? I mean, if I create a company in the USA and write in its ToS that by clicking on Agree, this user confirms that she will be my slave and do whatever I ask her to do? Can I legally write that? Because this is how Coinbase's ToS looks like. How can that be legitimate? There are lines that one shouldn't cross, this is no more different from slavery. Company (owner) has all the privileagues and customer (slave) has 0 rights. It's disgusting, my vote for DEX every day, every time!

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Quote from: Who is John Galt? on June 14, 2023, 08:34:23 AM

Since exchanges have begun blocking funds also on the basis of how “clean” they "think" bitcoins are or not, it has become increasingly dangerous to use centralized exchanges.

It has always been dangerous to use centralized exchanges and the reasons to not use them is endless. Classifying bitcoins according to how clean or not they based on their description is just another reason to hold your coins in your non custodial wallets and use decentralized exchanges.

Quote from: Who is John Galt? on June 14, 2023, 08:34:23 AM

And centralized exchanges are trying to gain control over real bitcoins with their division of bitcoins, but they still won’t succeed!

They already have a fair share of control and we cannot wish that away. Only education and more veteran users promoting the use of decentralized platforms and the risks of centralized ones can help this.
Also not compromising with statements like;
- "You can use them, but take your funds off them as soon as possible"
- "Only hold what you are actively trading"
- "Use them for the sake of liquidity".

And any other excuse to promote Centralized exchanges that is used.

- Jay -

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Quote from: Who is John Galt? on June 14, 2023, 08:34:23 AM

Since exchanges have begun blocking funds also on the basis of how “clean” they "think" bitcoins are or not, it has become increasingly dangerous to use centralized exchanges. They strive to make users afraid to withdraw funds to their wallets at all, so that later their coins will not be recognized as "dirty". They don't just want to get all our bitcoins and manage them themselves, they want to intimidate users into not wanting to get bitcoins outside of centralized exchanges (where it's not real bitcoins). Real bitcoins are only inside the bitcoin blockchain and nowhere else. And centralized exchanges are trying to gain control over real bitcoins with their division of bitcoins, but they still won’t succeed!

Yeah, definitely they won't succeed. They may put some burden and problems that many are going to be skeptic of what bitcoin is and they'll drop it down because the regulators and even the exchanges are implementing strict policies towards users. Another thing is, if they want a customer to freeze their funds, they'll do no matter what the reason is. They can always tell a lie and a thousand reasons why they're doing that because they've got policies that couldn't be disclosed to the users as there's always the pressure behind their back made by the regulators.

Who is John Galt?

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Quote from: KingsDen on June 13, 2023, 07:31:59 PM

Not your key, Not your coin. They can freeze your fund anytime without your permission.

Since exchanges have begun blocking funds also on the basis of how “clean” they "think" bitcoins are or not, it has become increasingly dangerous to use centralized exchanges. They strive to make users afraid to withdraw funds to their wallets at all, so that later their coins will not be recognized as "dirty". They don't just want to get all our bitcoins and manage them themselves, they want to intimidate users into not wanting to get bitcoins outside of centralized exchanges (where it's not real bitcoins). Real bitcoins are only inside the bitcoin blockchain and nowhere else. And centralized exchanges are trying to gain control over real bitcoins with their division of bitcoins, but they still won’t succeed!

o_e_l_e_o

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Quote from: Who is John Galt? on June 11, 2023, 07:24:33 PM

If I wanted to entrust my money to someone, then the choice immediately becomes so big, everyone wants to "help" me cope with all the difficulties that I may encounter. Such kind people! And as soon as my funds are not with me, it suddenly turns out that for my own safety, I can’t use my money in any way unless I go through the KYC procedure, which is approved by whoever now controls my money. And then suddenly I'm not me anymore?

All working as intended. Hand over your coins to centralized third parties, they will invest/loan/gamble/spend/steal your money to make profits for themselves while passing all risk of loss on to you, and if you want to actually get your money back then they will make it as hard as possible for you to do so. Look at the multitude of centralized third parties which were doing exactly this over the last few months - FTX, Celsius, Voyager, BlockFi, the list goes on. And now all the users of all those platforms have lost everything.

It is insanity for anyone to still store funds on a centralized exchange.

Quote from: Jon_Hodl on June 13, 2023, 03:27:42 PM

I know we all say it but "get your coins off of exchanges as soon as you can."

Go one step better: Don't use centralized exchanges in the first place.

When I first got involved with bitcoin, it took real effort to avoid centralized exchanges entirely and to only buy and sell completely peer to peer without any third parties. As time has gone on, it's become easier and easier. There are now multiple platforms to choose from, with built in non-custodial escrows and other such features which make the process faster and safer than ever.

https://kycnot.me/

KingsDen

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Quote from: Outhue on March 11, 2023, 01:27:30 AM

What could make an exchange to seize users assets

Inability to complete KYC or provision of wrong data for KYC
Non compliance to the rules of trade or P2P
If the law enforcement agents demand so
If the exchange decides to do so without any reasons
Use of tilted coins
Loggin in your account with frequently chnaging IP address and etc

Those points and more is given not based on the story of your US based friend. Not your key, Not your coin. They can freeze your fund anytime without your permission.

Jon_Hodl

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While I can't speak directly to that particular issue of Coinbase seizing user assets, what I can tell you is that I once had my Wells Fargo bank account shut down without warning for conducting trade with Coinbase.

IMHO, there is already a substantial effort to stop bitcoin without having to go through the legal loopholes. Everything from market manipulation to massive power plants being developed exclusively to mine bitcoin and bankrupt pleb miners.

"They" (the banks/Coinbase etc.) are absolutely seizing user funds that are stored on their platform. They will even make up completely bogus charges and put the onus on you as an end user to prove that you aren't doing anything illegal with your own money. I know we all say it but "get your coins off of exchanges as soon as you can." Custodial bitcoin is the largest contributor to bitcoin price suppression and leading cause of rug pulls.

Who is John Galt?

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Quote from: John Abraham on June 10, 2023, 05:26:27 AM

“For most people, for 99% of people today, asking them to hold crypto on their own, they will end up losing it.”

If I wanted to entrust my money to someone, then the choice immediately becomes so big, everyone wants to "help" me cope with all the difficulties that I may encounter. Such kind people! And as soon as my funds are not with me, it suddenly turns out that for my own safety, I can’t use my money in any way unless I go through the KYC procedure, which is approved by whoever now controls my money. And then suddenly I'm not me anymore?

And then it turns out that I want to use my money for the wrong purposes, so it will be safer if they remain in the custody of someone who knows better than me how to properly dispose of them.

And then that someone gets "hacked" or just goes bankrupt and sends my KYC verification details to any scammers willing to pay for it.

As far as I can see, most on this forum have not lost any money from their own open source non-custodial wallets. But problems with centralized services appear one after another.

Topic: What could make an exchange to seize users assets (Read 717 times)