[2019-06-30] Bittrex User Alleges Funds Were Withheld in Recent Lawsuit

[roosbit]

A New York resident has filed a lawsuit against crypto exchange Bittrex for allegedly withholding funds, industry news outlet The Block reports on June 30.

Per the report, the plaintiff claims to have deposited $120,000 onto her Bittrex account in August 2018 and that the company suspended it and refused to release the funds until November of this year. She also alleges that the exchange “attempted to extort her by withholding the funds she had in her account” unless she signed an agreement giving up her rights to sue the company.

Bittrex claims that the plaintiff’s allegations are not true and that she failed to provide evidence of the source of funds as required by New York state and U.S. federal law. According to Bittrex, when the plaintiff registered on the cryptocurrency exchange, she agreed to the platform’s terms of service, which include an arbitration clause.

The first page of the terms reportedly specifies that the aforementioned clause “governs resolution of certain disputes and waives any right to trial by jury or to participate in a class action.” The defendants reportedly moved to compel arbitration or transfer the case to a federal court in Seattle.

The plaintiff did not respond to the request, which has been granted by the court. The report’s author notes that he believes the plaintiff to have little cause for optimism:

“One imagines an uphill battle convincing an arbitrator that (if we assume Bittrex’s argument is correct) that requiring documentation of source of funds is somehow unlawful, if required by state and federal law.”

As Cointelegraph recently reported, clientele from multiple states in Brazil have filed lawsuits against bitcoin (BTC) investments firm Bitcoin Bank Group for inaccessible crypto funds.

Also in April, news broke that a former employee at United States-based crypto exchange Kraken is suing the firm for over $900,000, claiming the exchange failed to pay him for his work there.

https://cointelegraph.com/news/bittrex-user-alleges-funds-were-withheld-in-recent-lawsuit

[Slow death]

This bittrex TOS is too exaggerated, does it mean that US state and federal laws require people to declare the source of money even if it is $ 1? Is there not a limit of money that if passed must be declared the origin of money? how many bittrex clients have from the USA? will it be that bittrex asks all US customers to hand in the proof of the origin of the money even if they deposit $10 in bittrex? there are probably many US customers using bittrex. there should be a money limit that if exceeded the person should deliver the document proving the origin of the money.

[squatter]

This bittrex TOS is too exaggerated, does it mean that US state and federal laws require people to declare the source of money even if it is $ 1? Is there not a limit of money that if passed must be declared the origin of money? how many bittrex clients have from the USA? will it be that bittrex asks all US customers to hand in the proof of the origin of the money even if they deposit $10 in bittrex? there are probably many US customers using bittrex. there should be a money limit that if exceeded the person should deliver the document proving the origin of the money.

I agree. They used to allow unverified accounts with limited withdrawal limits too, but things have completely changed since early 2017. Bitstamp and Bittrex are two exchanges I completely avoid because their customer due diligence is too burdensome and invasive.

[dothebeats]

Bittrex used to be one of the best exchanges there is within the market, but now they are just simply getting worse by the day. Unlike Binance, Bittrex is not forced by any regulatory pressure for it to behave the way it is right now, so they are basically just screwing customers over and trying to play the long game for people to just give up and hope that they end up with the users fund. Also, the proof of source of income they are asking on exchanges for additional KYC documents is simply too invasive, and is not necessary IMO because that's not their business to know where I'm getting the money from, it's just their job to accept it and let me trade. These kind of information should only be given to law enforcement if I end up screwing and made something illegal, not when I'm doing something for my own gain.

[squatter]

Bittrex used to be one of the best exchanges there is within the market, but now they are just simply getting worse by the day. Unlike Binance, Bittrex is not forced by any regulatory pressure for it to behave the way it is right now, so they are basically just screwing customers over and trying to play the long game for people to just give up and hope that they end up with the users fund.

It has everything to do with regulatory pressure.

A few years ago, everyone was using unverified accounts and withdrawing freely without regional restrictions. Basically overnight, unverified accounts were dropped to 0.025 BTC and 0 BTC daily withdrawal limits depending when the account was created. Then they're banning Iranians, Crimeans and others. Not long after that, they segregated US users from the rest of the world and pulled dozens of token markets from US investors, due to pressure from the SEC. Then came mandatory KYC for all users. Now, similar to Bitstamp, we're seeing increasing numbers of complaints about their enhanced due diligence policies. The list goes on. They're obviously reacting to pressure from the Treasury Department, SEC, FINCEN, possibly Homeland Security and others too.

Bittrex seems to be turning into the next Bitstamp/Gemini -- quick to freeze or terminate accounts, overly invasive AML/KYC/CFT procedures, etc.

[BitHodler]

Unlike Binance, Bittrex is not forced by any regulatory pressure for it to behave the way it is right now, so they are basically just screwing customers over and trying to play the long game for people to just give up and hope that they end up with the users fund.

That is not correct. Bittrex has always had the intention to offer people actual fiat trading, but for that to happen they had to clean up their exchange and become compliant enough to do so.

Abiding by government based regulations isn't enough because they also have to please their very demanding banking partner at the same time, so you can imagine how difficult it is not to do what Bittrex did.

Could they be more transparent about the whole situation and handle things differently? Sure, but we shouldn't forget that it was an unregulated exchange not giving a shit for years.

Going from shitcoin exchange to a professional platform requires some serious adjustments. They seem overly concerned to almost paranoid to not mess up somewhere in legal terms, but it unfortunately goes at cost of their users.

[prophetx]

Unlike Binance, Bittrex is not forced by any regulatory pressure for it to behave the way it is right now, so they are basically just screwing customers over and trying to play the long game for people to just give up and hope that they end up with the users fund.

That is not correct. Bittrex has always had the intention to offer people actual fiat trading, but for that to happen they had to clean up their exchange and become compliant enough to do so.

Abiding by government based regulations isn't enough because they also have to please their very demanding banking partner at the same time, so you can imagine how difficult it is not to do what Bittrex did.

Could they be more transparent about the whole situation and handle things differently? Sure, but we shouldn't forget that it was an unregulated exchange not giving a shit for years.

Going from shitcoin exchange to a professional platform requires some serious adjustments. They seem overly concerned to almost paranoid to not mess up somewhere in legal terms, but it unfortunately goes at cost of their users.

The USA side will be sold off at a discount within 24 months as their business goes to 0. Or they will just shut it down.

[Clement Kaliyar]

The USA side will be sold off at a discount within 24 months as their business goes to 0. Or they will just shut it down.

What is the situation with the exchange as i am having my funds in bittrex and i have verified everything what they asked and i cannot find the news what you are talking about here, is this a speculation that they will be selling off or is there any real substance as i cannot find any source for what you are saying.
Even if they shut down they will allow users to withdraw the coins.

[malevolent]

What is the situation with the exchange as i am having my funds in bittrex and i have verified everything what they asked and i cannot find the news what you are talking about here, is this a speculation that they will be selling off or is there any real substance as i cannot find any source for what you are saying.
Even if they shut down they will allow users to withdraw the coins.

It's speculation but not one without merit. Between blocking US residents from buying certain coins/tokens, blocking US residents altogether and moving moving companies to new jurisdictions all the time, it would be unsurprising. If you're fully verified then withdrawing shouldn't be a problem.