Using Virtual Private Networks (VPN) to sneak around on exchanges

[Pipdips]

How does this weigh on you?  I would feel like doing something wrong, like trying to cheat the house in a casino.  So the exchange says that they do not allow people trading from your geographic location, so you open up a VPN and sneak in there that way, undetected.

What ways do the exchanges have to identify people on VPN's?  If an exchange catches you on a VPN (or later when moving funds out of their exchange and they identify your location) what repercussions are fair?  Is freezing all your funds too harsh of a penalty?

[DaveF]

What ways do the exchanges have to identify people on VPN's?

A lot (most?) VPNs are coming through somewhat known addresses. Remember, you are not the only one using that service so they may (or may not depending on how busy they are and how many users are using a VPN) see many connections from 1 set of IP addresses.

If an exchange catches you on a VPN (or later when moving funds out of their exchange and they identify your location) what repercussions are fair?

Depends on why they are blocking you. If they are blocking because your country has certain rules and regulations then they might take all your coin. It's easier for them to say, we caught this person coming in from a restricted country so we are holding their coins pending guidance from the government of that country. If they are blocking you because they just want to deal in their region and have no desire to be worldwide, then a "here are your coins back minus a 10% processing fee, don't let the door hit you in the ass on the way out" is more reasonable response.

-Dave

[exstasie]

How does this weigh on you?  I would feel like doing something wrong, like trying to cheat the house in a casino.  So the exchange says that they do not allow people trading from your geographic location, so you open up a VPN and sneak in there that way, undetected.

It's not like cheating at all. It's more of a "scratch my back and I'll scratch yours" situation. Exchanges badly need the liquidity but fear US regulators. Allowing VPN usage is a happy medium that addresses both concerns.

What ways do the exchanges have to identify people on VPN's?  If an exchange catches you on a VPN (or later when moving funds out of their exchange and they identify your location) what repercussions are fair?  Is freezing all your funds too harsh of a penalty?

Of course it's too harsh. A terms violation (with no financial loss to the exchange) doesn't justify confiscating funds!

[Pipdips]

Ha... dude you have more than one monkey on your back feeding you the info you want to hear, but what is the truth here?  You went out of your way in order to justify things, don't you think, not even just a little bit?

Get this, then you even go so far as deciding the rules and what is fair punishment. What's up with that huh?

[jhenfelipe]

You know what, read the site's Terms and Conditions. If your area is restricted, intentionally disobey the terms, been caught later on, it's your fault. It's just simple. (you refers to the user)

Just know that they have ways (regardless of what or how). Before siging up they ask you if you accept the Terms, if you accept that and freezing of fund was stated in there, I can say it's fair. If you don't want that to happen, you should comply. There's always a consequence, sometimes we just don't realize it until it happens.

[Pipdips]

You are trying to say that it is like cheating the house at a casino?

I see, so it's like playing by your own set of rules in somebody elses house. Mkay..

[hugeblack]

VPN service is used to exceed the limits imposed by your country on a site or service, for example, some countries prohibit porn sites.
In other words, the site does not mind your presence or use, but the state.
If the site is banned in your country, circumventing it using VPN will expose you to losing your money because you violate the terms of service of the site. If they let you use the account, you'll be discovered soon.

[exstasie]

Ha... dude you have more than one monkey on your back feeding you the info you want to hear, but what is the truth here?  You went out of your way in order to justify things, don't you think, not even just a little bit?

Get this, then you even go so far as deciding the rules and what is fair punishment. What's up with that huh?

You asked if a punishment was too harsh, I said yes. That's all.

I've been around the block with exchanges and derivatives platforms. I watched Bitmex rise from nothing to the highest volume platform in the world. They did it on the backs of US traders. For several years they just buried the ban in the terms and let us register and trade from US IP ranges. That's a pretty clear indication that the ban was "in name only" and they were intent on welcoming US traders.

[Pipdips]

You asked if a punishment was too harsh, I said yes. That's all.

I've been around the block with exchanges and derivatives platforms. I watched Bitmex rise from nothing to the highest volume platform in the world. They did it on the backs of US traders. For several years they just buried the ban in the terms and let us register and trade from US IP ranges. That's a pretty clear indication that the ban was "in name only" and they were intent on welcoming US traders.

Interesting info.  Your position and description is convincing enough for me to change my mind, slightly.  But - Are there any examples of people ever getting caught using a VPN and the exchange did something about it?

[exstasie]

You asked if a punishment was too harsh, I said yes. That's all.

I've been around the block with exchanges and derivatives platforms. I watched Bitmex rise from nothing to the highest volume platform in the world. They did it on the backs of US traders. For several years they just buried the ban in the terms and let us register and trade from US IP ranges. That's a pretty clear indication that the ban was "in name only" and they were intent on welcoming US traders.

Interesting info.  Your position and description is convincing enough for me to change my mind, slightly.  But - Are there any examples of people ever getting caught using a VPN and the exchange did something about it?

Here's one recent case on Bitmex: https://www.reddit.com/r/BitMEX/comments/99yo3u/us_citizen_used_fake_info_vpn_to_trade_on_bitmex/ee77ad1/

As far as I know that's typical.....account closed, funds returned. I've never heard of them confiscating peoples money in these cases. I assume the same is true with Bitfinex because there's lots of reports of frozen accounts/KYC demanded but people don't say their money got taken.