I know nothing about Kraken, but another exchange (Paxful, based in NY) even complies with the Philippines National Police.

https://www.reddit.com/r/paxful/comments/swbuvt/my_account_has_been_blocked_by_philippine/

It seems international agreements on crypto have been made between many countries, and your money on exchanges can be messed with by all kinds of parties around the world.

For example anyone can report an internet crime to the IC3, but what the FBI will do for you is another question. For now you might want to get professional legal advice from a local lawyer to explore your options first. Hiring lawyers who specialize in crypto is probably an overkill for your case because your dispute with Kraken sounds like a simple breach-of-contract issue.

Once you figure out what legal actions you'll take against Kraken, see if you can pay a paralegal (not a lawyer) to help you write a demand letter detailing the legal steps you'll take. After you send the letter to Kraken, be prepared to follow through with your actions (like hiring a lawyer) if Kraken doesn't budge. This could save you some money if Kraken doesn't escalate.

Hiring a lawyer should probably be your last option due to the cost. I just checked with a regular business lawyer and she would charge about $7500 for your case (a 15% cut), so it seems you might want to get some free/paid legal advice before going all-in on a lawyer. If what Kraken's doing is illegal, you can even just let the police help you.

I don't know any lawyer who practices near Kraken's office. You can talk to any business lawyer or just about any affordable lawyer near you to find out how to sue Kraken in the cheapest and best way. This is how I learned how to sue Paxful from outside the US. Just talk to any qualified lawyer near you first. Most lawyers offer free 1st-time consultations, and you city might also have free legal clinics.

Kraken is ignoring you because they know there is nothing you can do to get your money back without proper legal help.

You can easily sue Kraken without being in the US and without paying a steep price. Some lawyers write demand letters for $25 and represent you for $500.

Here's what you can try:

1. Find a lawyer located near Kraken's US office

2. Verify your identity with the lawyer

3. Pay the lawyer and let the lawyer deal with Kraken

The lawyer can represent you in court if Kraken decides to fight you, and you don't ever need to set foot in America. Many courts these days also hold zoom meetings.

Just know your case could drag out for years if you sue in a federal court. If you take it to small-claims, it might be much faster, but expect to recover at most ~$20K.

Thanks so much for the replies. I've been following this thread and wanted to post an update:

Paxful told me I must use Jumio to verify my identity because Paxful lacks the capacity to verify user identity. I don't intend to hide my identify from Paxful, but I also don't want Jumio to keep my biometric data and potentially ask for more documents endlessly.

I've spoken to a friend's lawyer who is willing to help me verify my identify for Paxful and sue Paxful if Paxful insists I use Jumio to verify my identity. For now I'll hold off on suing/traveling due to covid. If anyone has anything to add, please feel free to chip in. Thanks.

If you can prove when you bought the bitcoins, you should be fine. If you can't reasonably explain where your money came from, your money might be seized. Best talk to a tax professional before moving around this kind of money.

Even if you're using a legitimate exchange, the CRA might audit you and ask you to prove certain things, such as where your original investment came from. Be prepared to show records and documents to prove you made all your money legally.

Don't suddenly move $200K into a bank without consulting with a tax lawyer or account, and don't hesitate to ask them if they've dealt with situations like yours before.

Will this affect P2P exchanges based in Estonia but incorporated in the US like Paxful? I still have ~$2k stuck on Paxful because I'm never doing KYC, and Paxful technically doesn't directly hold/control any customer's bitcoins. Still, if Paxful's can't operate in Estonia anymore or is simply going bankrupt, what kind of excuse could they use to prevent people from withdrawing?

Based on my limited experience there, your chances of getting scammed is high and Paxful's moderators are easily fooled by experienced scammers. Even Paxful's CEO admitted that many disputes are basically decided on coin flips. (source: https://medium.com/the-paxful-blog/an-apology-to-paxful-customers-the-itunes-dispute-dilemma-ed1b87d7e020)

If you still decide to sell gift cards there, consider not only your chances of getting scammed and but also being wronged by Paxful's mods.

To me Paxful is a scammer's top choice to sell stolen gift cards or rip off naive gift card sellers, and the site manages to appear legit to some people because most scammers are ID verified. However, even nearly fully verified Paxful accounts can be bought for $50-200 on legal sites. To what extent is this company willfully accommodating scammers? I think it's a matter of time before law enforcement catches up to how morally flexible this company really is. For now Paxful is still a small fish compared to some of the bigger sites that uncle sam is busy with.

These are good suggestions. I'll leave the account for now. Thanks for chipping in everybody.

Handing over a clean copy of my photo ID seems too risky for $1k, especially when Paxful's previous ID verification provider was hacked and 4.8 million user data went on sale for 1btc on the darkweb. I don't want see my ID and my verification video being sold anywhere, so now I'm stuck in this position.

Appreciate the warning and what you said could definitely happen. Maybe I should just walk away from this thing.

Thanks for the response. You're right that the account can be verified with another person's ID because it's simply phone-verified at the moment.

Paxful is asking me to follow its standard ID verification procedures, and I'm hoping to find someone who can verify my account, withdraw the bitcoins, and close the account. The problem is I don't know if there's any way to do this safely.

(Hi mods, if this post doesn't belong here, please move it to the right place. thanks)

So I stored about $1k worth of bitcoins on Paxful when ID verification wasn't required, but I can't withdraw now because of Paxful's new ID verification policy.

I definitely played myself here, and I'd appreciate any suggestions on how to legally withdraw from Paxful without doing ID verification.

The only thing I can think of is selling my Paxful account at a 50% discount, and I'm willing to do it face-to-face if we're in the same city (in north america).

I'm also willing to use a reputable escrow here and bear all fees if we do this online, but I'm not sure how to really do it this way.

If anyone knows how I can sell my Paxful account somewhat safely, please offer a suggestion. Thanks.

Sorry I'm a complete noob here. Can I send you webmoney ($50-100) and receive btc?

Or are you buying btc only? Thanks.

Hey mods, if I'm posting at the wrong place, please move this to the right section. Thanks.

Anyway, I deposited about $1000 worth of bitcoins on Paxful when ID verification wasn't required, but now Paxful won't let me withdraw unless I go through ID verification. Because I don't want to hand over my ID, my bitcoins are stuck.

I've spoken to a lawyer who suggested I get a lawyer in New York (where Paxful is based) if I really want to take it to small-claims court, and I want to hold off on suing for now because people here might have easier solutions. If anyone has any ideas, please help me out. Thanks.

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