What could make an exchange to seize users assets - page 3.

Cryptomultiplier

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

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

Coinbase exchange was launched in 2012 right? Have there ever been any cases of users' assets being frozen and never released to them? I know someone living in the united states, she said that Coinbase seized her crypto in 2020 within that COVID-19 period and to date, the assets were never released back to her. I respect coinbase so much and I am curious why such a thing would happen.

Yes. If you search for such result on the internet, You will find plenty of users' account was frozen. Coinbase has a big list of reasons that can cause freezing your funds. Most probably, your friend deposited Crypto in Online casinos or paid for adult content and services. Or maybe invested in pyramid Schemes. Most Users do not read the User agreement before they sign up.

Coinbase Prohibits Plenty of Businesses like Investment and Credit Services, Restricted Financial Services, Intellectual Property or Proprietary Rights Infringement, Counterfeit or Unauthorized Goods, Regulated Products and Services, Drugs and Drug Paraphernalia, Pseudo-Pharmaceuticals, Substances designed to mimic illegal drugs, Adult Content and Services, Multi-level Marketing, Unfair, predatory or deceptive practices, High-risk businesses.

Coinbase itself mentioned why they could freeze your funds:

Quote from: https://help.coinbase.com/en/coinbase/other-topics/other/does-coinbase-freeze-accounts

In extremely rare circumstances, and only where required by law or authorized by the Coinbase User Agreement, Coinbase may block or "freeze" customer funds on our platform. For example, we will take this action when:

We are required to comply with an order from a court or other authority that has jurisdiction over Coinbase which compels us to restrict access to funds.

We are required by law to freeze or block assets in compliance with a sanctions program, including, but not limited to sanctions programs administered by the U.S. Office of Foreign Assets Control (OFAC).

For more detailed information, I recommend you read this:

[1] Does Coinbase freeze accounts?
[2] Coinbase Prohibited & Conditional Use Policy
[3] Coinbase User Agreement _{Read from 6.1 to 6.3 SUSPENSION, TERMINATION, AND CANCELLATION.}

These findings has created a new thought pattern for me. I would never even think that such power could be accorded to an exchange I downloaded or registered on to hold my coins.
I would have to read the user agreement from now on before joining or using an exchange, because what's the point of using a decentralized network if it isnt decentralized?
If it is controlled by other external bodies, even upon completion of my KYC verification and adherence to its functions for my benefits, why would my account be frozen without an explanation as to why?
Unless I falter, still a notification should be sent out to me the user, because it is not only such app that I have to adhere to its user agreement. I may not even remember what I read on its user agreement page nor even remember the limitations imposed to prompt such a freeze of my account. What now makes them better than using a fiat system?

RiverBoy

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The most reason why exchange seize user's asset is not being verify account, which is the most policy for many exchange, which everyone has to verify account as know your customer (KYC) before funding.

Lucius

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The truth is that CEX (centralized exchanges) can do whatever they want with your account and that in most cases, an ordinary user cannot do anything to change it. Those few who can afford a lawyer and engage in a court process can expect an expensive and protracted battle, and we know that the small ones have a hard time winning the big ones.

Because of all this, using CEX is even riskier, because it is not only a matter of possible hacking, phishing or theft of your personal data, but also the possibility of losing your funds at any moment, without any explanation.

Dunamisx

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Any exchange can make a seizure of your asset by many ways as long as they are centralized, it has been placed in two category of seizures, first is when the exchange itself take full responsibility for doing that due to KYC related issues or AML protocols when your account is suspected with involvement in some sort of suspicious activities, second is that the centralized exchanges can also be attacked by scammers and bring down the entire people's asset and cart them away.

virasog

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

Coinbase exchange was launched in 2012 right? Have there ever been any cases of users' assets being frozen and never released to them? I know someone living in the united states, she said that Coinbase seized her crypto in 2020 within that COVID-19 period and to date, the assets were never released back to her. I respect coinbase so much and I am curious why such a thing would happen.

There could be many things that may lead to the funds being frozen by the exchanges, Those people may have violated the terms and conditions of the casino which may include the use of VPN. Multiple accounts and funds being transferred from illegal sources and so on and on.

There can be number of reasons for this where the good exchanges like coinbase or binance can freeze user's funds.

And there may be unlimited number of excuses where scam exchanges can freeze users funds and not let them withdraw.

Cookdata

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

Coinbase exchange was launched in 2012 right? Have there ever been any cases of users' assets being frozen and never released to them? I know someone living in the united states, she said that Coinbase seized her crypto in 2020 within that COVID-19 period and to date, the assets were never released back to her. I respect coinbase so much and I am curious why such a thing would happen.

Coinbase is not the only exchange that is guilty of this nonsense of suspending user's accounts, other exchanges like Binance, Kucoin, and other top-tier exchanges do this thing. I personally know a friend that had about $1750 on his Binance exchange account and they suspend the account in late 2021 without any reason, they only told him that the account is suspected of some activities and they have to review and investigate before they will release the account and till today, nothing has been done on the account.

The only lead we had as the reason why they might have suspended the account was that the guy was using VPN and it is always on his phone but that is not enough reason to block the account, if they fear US law and compliance, they should have warned him in the beginning and adjustment can be done by stop use of the VPN but all of sudden, they call for suspending of the accounts, fear centralized exchanges. Sad

ZAINmalik75

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

Coinbase exchange was launched in 2012 right? Have there ever been any cases of users' assets being frozen and never released to them?

Mostly such kind of cases like freezing funds comes from Centralized exchange like coinbase which you had mentioned and many more. Mostly they freez fund of Thier customer on different bases like not providing KYC or submitting wrong information, some time payment of some illegal sites from your account and many more.
So the best option for everyone is to use decentralized exchanges which will provide you privacy and where you can feel safe.
But instead of centralized and decentralized exchanges you can you your hardware wallet where safety of your fund will be 100% sure.

Sunrise360

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One of the reasons why an exchange will seize your assets is when you place an order to sell your assets, but after receiving payment from a buyer, you fail to release the assets to the buyer. In this case, the buyer will have to report you, from the report your problem has started if you don't rectify the issue.

armanda90

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Its seems not clearly reason about Coinbase account seize and freeze the user assets, not to get respond from both side between victim until his account seize and not ability withdrawing his assets and one side need respond or reason from Coinbase why account have been freeze. I have longer time with Coinbase and my fund still secure without any problem due have pass KYC.

I think problem with KYC or user can contact with Coinbase support ask what have to do and get back his account, I sure have solution for both side between Coinbase and user with account have been freeze to get back his fund.

LDL

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

Coinbase exchange was launched in 2012 right? Have there ever been any cases of users' assets being frozen and never released to them? I know someone living in the united states, she said that Coinbase seized her crypto in 2020 within that COVID-19 period and to date, the assets were never released back to her. I respect coinbase so much and I am curious why such a thing would happen.

Generally the exchange authorities do not easily freeze the funds of their customers or users, but sometimes for special reasons they can temporarily freeze the funds of the customers.
Personal information ,If a customer has placed the personal information wrongly i.e. if he has submitted wrong information while doing KYC, then the exchange authority can freeze his funds temporarily.
Illegal funds,If a user transfers funds from an illegal source, the exchange authority may freeze the user's funds permanently.
Location,Many times, if the user's location is in the restricted list of the location of the exchange, then the exchange authorities can temporarily and permanently freeze the funds in the user's account while transferring funds to that location.

@OP, According to the information provided by you, the female user has committed any illegal activity against the Coinbase rules or against the terms and conditions under which the exchange must be used. Because of this, the Coinbase authorities have permanently frozen the user's account funds.

Frankolala

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It sucks to use that exchanges seizes customers funds and can't even tell them the reason if their actions. This means that the moment you sign up with them and keep your coins in the custody,it is no longer your coins because they can do whatever that they like with it and you don't have a voice on your own funds.

It is much better to deal with decentralized exchange like bisq,which it quite safe,than giving your hard earned funds to exchanges who are not trusted and can freeze your access due to their own selfish interest. Too many nonsense reason why a customer funds should be freeze Not your keys not your coins

Krislaw

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Crypto exchanges can seize users fund for reason like
receiving stolen funds
discrepancies in details submitted during account registration or insufficient info during AML process.
use of unsupported tools in ones account.
there are lot to mention And these exchanges will never give you reasons because of confidential reasons.

dkbit98

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

Coinbase exchange was launched in 2012 right? Have there ever been any cases of users' assets being frozen and never released to them? I know someone living in the united states, she said that Coinbase seized her crypto in 2020 within that COVID-19 period and to date, the assets were never released back to her. I respect coinbase so much and I am curious why such a thing would happen.

It can happen for any reason and they don't even need to give you real explanation why they froze your coins.
They can claim your coins are involved with some hacks and stolen funds, or they can say your source of funds is suspicious, and it can even happen because of you location.
This can happen with all centralized exchange, not just for Coinbase but I think Coinbase is going to be inbig trouble because of connection with USDC so better withdraw coins to your own wallet.
You can use P2P trading and decentrlaized exchanges, than you dont have to worry that someone will freeze your accounts.

cryptoaddictchie

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Quote from: Cryptoababe on March 11, 2023, 05:53:42 PM

For me, maybe your friend received her assets from a red flagged wallet. In this case.,some exchanges will freeze the receivers account or disable the account from trading. Ive seen cases related to this on Binance and the owner account was disabled from trading.

Possibly this one. There are lots of incident were am account was locked due to malicious funds that coming from somewhere or has been flagged by the exchange and he keeps getting funds from that. Mostly gambling sites, or another one might be the lack of personal identification of the person that needs to give up.

medussa

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It happens with many exchanges- not just coin base, any government-regulated exchange can freeze your funds for any reason, from suspicious transactions to money laundry or even inadvertently buying bitcoins or crypto assets that have been blacklisted or used to fund illegal activities. That is why buying bitcoins in the streets and then sending it to a centralized exchange can sometimes pose a problem.

Taskford

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

Coinbase exchange was launched in 2012 right? Have there ever been any cases of users' assets being frozen and never released to them? I know someone living in the united states, she said that Coinbase seized her crypto in 2020 within that COVID-19 period and to date, the assets were never released back to her. I respect coinbase so much and I am curious why such a thing would happen.

This will only happen if coinbase find suspicious activity on your account and you cannot provide proof of identification that you own the account for sure in this case the users funds will get freeze until he can provide the necessary requirements ask by the platform. Also read the term of service since there are written rules regarding on how you can avoid your account to get lock up.

o_e_l_e_o

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Quote from: John Abraham on March 12, 2023, 05:52:43 AM

I use this platform to trade with my locals because I do not have other options to trade with locals.

Check out some decentralized exchanges: https://kycnot.me/. You might find some local activity.

Quote from: John Abraham on March 12, 2023, 05:52:43 AM

I checked Binance and Kucoin user agreements they literally said they can terminate your account and seize your fund for any reason without giving you any explanation.

Yup. Every centralized exchange is the same.

Quote from: John Abraham on March 12, 2023, 05:52:43 AM

I didn't know about those platforms. I would like to create a separate thread regarding this issue and I will dig a few more popular exchanges user agreements and gather them all together. Would you mind if I quote your old post about Celsius, Voyager and BlockFi?

By all means, but these platforms have already collapsed and declared insolvency (exactly because they were doing what I highlighted above - gambling all their users' deposits in order to try to make themselves more profit).

Quote from: John Abraham on March 12, 2023, 05:52:43 AM

This is the mistake we do as users. I myself never bothered to check full terms and conditions before I sign up. That's sick.

It's impossible to read the terms for every single website or service that you use, but when it comes to something that you are going to be sending money to, then people should really take the time to figure out just what they are signing up for. In the case of centralized exchanges, it is usually a case of signing away all your coins, all your privacy, and all your rights.

John Abraham

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Quote from: o_e_l_e_o on March 12, 2023, 05:16:33 AM

Pretty much every centralized exchange has words to the same effect buried somewhere in their legal documents. The fact is that as soon as you deposit your coins to any centralized exchange, they do not belong to you and the exchange can do anything they like with them, including simply keeping them for themselves. It happens all the time, but everyone thinks "Well, it won't happen to me", right up until it does and they lose all their money.

After reading this post. I checked the user agreement of the most trusted (?) Exchange that I use as well. It's Binance. I use this platform to trade with my locals because I do not have other options to trade with locals. I checked Binance and Kucoin user agreements they literally said they can terminate your account and seize your fund for any reason without giving you any explanation. Also, they won't give any explanation to a third parties including the law firms as they already have the rights because you accepted the terms and conditions when you signed up.

Quote from: o_e_l_e_o on February 07, 2021, 06:43:45 AM

all their users are shocked that they were engaging in the exact behavior they said they were engaging in because none of the users had bothered to read the terms.

This is the mistake we do as users. I myself never bothered to check full terms and conditions before I sign up. That's sick.

o_e_l_e_o

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Quote from: John Abraham on March 11, 2023, 11:41:34 AM

I don't understand why OP respects Coinbase so much, but this is the sickest user agreement I have ever read. To be honest, I didn't read their user agreement before today. But I wanted to dig into the reason, and I was shocked.

Pretty much every centralized exchange has words to the same effect buried somewhere in their legal documents. The fact is that as soon as you deposit your coins to any centralized exchange, they do not belong to you and the exchange can do anything they like with them, including simply keeping them for themselves. It happens all the time, but everyone thinks "Well, it won't happen to me", right up until it does and they lose all their money.

Quote from: John Abraham on March 11, 2023, 11:41:34 AM

I believe over 95% of Coinbase users don't know about this. Almost no one reads the user agreement when they sign up. If anyone does, I don't think they will end up signing up on Coinbase after they find what coinbase can do. Almost nobody knows what's hiding in their user agreement page.

The exact same thing happened with the likes of Celsius, Voyager, and BlockFi. Here's a post I made several years ago warning people about these platforms: https://bitcointalksearch.org/topic/m.56289293. In it, I point out that their terms quite clearly state that they will lend out, gamble and sell your coins, all while keeping zero collateral, and you have absolutely zero rights if it all goes to shit. Fast forward several years and these platforms collapse because of this exact reason, and all their users are shocked that they were engaging in the exact behavior they said they were engaging in, because none of the users had bothered to read the terms.

Cryptoababe

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For me, maybe your friend received her assets from a red flagged wallet. In this case.,some exchanges will freeze the receivers account or disable the account from trading. Ive seen cases related to this on Binance and the owner account was disabled from trading.

Topic: What could make an exchange to seize users assets - page 3. (Read 717 times)