Hey guys,
Whilst posting in this thread might raise a few eyebrows, the accusation by this ex-forum member has continued to be an issue for our trust rating and reputation here on the forum for some time.
Despite this, the support from many on here has been just amazing and we have worked hard over the past year to bring value to you all with great promotions and be seen as a valued member of the community. Just like you all we are advocates of Bitcoin, and love our sports!
We have had a look back into this issue with Excess Test, and at the time the responses from us on here left a lot to be desired, so we wanted to lay it out so that anyone can read through in detail and hopefully make an informed opinion on the matter.
Cheers,
Sportsbet.io
DefinitionsOperator – Sportsbet.io (operated by mBetSolutions N.V founded under and governed by the laws of Curacao. Licensed to provide online betting services under gaming license 1668/JAZ issued by the Government of Curacao).
Client – Natural person whose identity cannot be disclosed in this document. Account holder in Sportsbet.io. User “ExcessTest” in Bitcointalk.
Terms and Conditions – Set of provisions that govern the legal relations between the Operator and the Client.
https://sportsbet.io/about/terms-and-conditions.
Double spend - A well-known fraudulent scheme i.e. depositing with a lower than normal transaction fee, placing high stakes bets and in case of a loss the deposit transaction would be spent elsewhere with a higher transaction fee, effectively invalidating the deposit that was credited to the players account on Blockchain.
Example: A player has a total of 5BTC in his/her Bitcoin wallet. The Player deposits the 5BTC with a very low fee to an online casino which allows immediate gameplay without any confirmations of the transfer of funds on the blockchain. The player then loses 1 BTC in playing however due to the low fee and hence slow transaction, the initial deposit of 5BTC is still not confirmed in the blockchain. The player then maliciously issues another transaction with the same inputs of the initial 5BTC to elsewhere/to a different address under his or her control with a higher transaction fee which will be confirmed faster than the initial 5BTC transfer, therefore rendering the deposit invalid, and a loss of 1BTC to the casino.
Timeline of events30.03.2017 – The Client registered an account with the Operator and makes first deposit of 4BTC
30.03.2017 – The Client was immediately flagged for suspicious gameplay due rapidly changing gameplay dependant on whether the transaction was confirmed in the blockchain or not.
30.03.2017- 02.04.2017 – The Client continues the suspicious gameplay over the course of 4 deposit/withdraw instances.
02.04.2017 – The Client requested a withdrawal in the sum of 20.6 BTC which was declined by the Operator due to suspicious gameplay.
03.04.2017 – The Operator asked the Client to undertake a KYC review which the Client failed (see reasoning below).
03.04.2017 – The Clients user account was disabled (see reasoning below).
12.04.2017- The Operator pointed out the issues with submitted documents and asked the Client for additional information.
13.04.2017 – The Client submitted additional documents (KYC review failed again).
17.04.2017 – The Operator offered a settlement to the Client in the form of 15 BTC lump sum payment. The Client accepted the offer and the funds were transferred over on 19.04.2017.
Transactions between the Operator and the Client Date stamp Type Status Amount in BTC Tx ID
30/03/2017 Deposit CONFIRMED 4 8521e01d44873a24669d3d6c48423f7a598a8db0385ba99b1ad46fa558683f19
30/03/2017 Withdraw CONFIRMED 5.3 60cd9a56929a3fb56b9adc169c981cd7de676af85c53f73157f6400951685e67
31/03/2017 Deposit CONFIRMED 5 4fe0b214223a2c09831909096b7a08a1fc4255e8eade3340c2607e838f35bbde
31/03/2017 Withdraw CONFIRMED 7.9 a86d776077ef766934dc18f4a14f5ce404a92aaef63ca2f9e6e4e003c7befef5
31/03/2017 Deposit CONFIRMED 7.5 863e6ca0ce7ab3af64304103513c9cb874dc390be3705376e4fc8181c5641e51
01/04/2017 Withdraw CONFIRMED 11.6 0dfa87c8ac207dc05ba4c3018bd51767ee5a1c93a27dada52c34088d3d6a264e
01/04/2017 Deposit CONFIRMED 11 f2baf24ef8120eabcbea8448aba5c2e733808be7f4fad1d636ef0572c180bfde
01/04/2017 Withdraw CONFIRMED 15.6 13ce7637e6dee284692ee169b6186470c58aa29ac8be9a9a17047084c5f92085
01/04/2017 Deposit CONFIRMED 15 2566d09ce625c5f222baaa89f1154d3c40cdf06270263307f8679c6d88201e8e
02/04/2017 Withdraw DECLINED 21.5
19/04/2017 Manual Withdrawal (Settlement) CONFIRMED 15 5b327205888be7cb3fdb5f5e371a565de9cd1e1ed6ab28c38832e1c52b30df97
As seen from the table above the Client deposited a total of 42.5 BTC and withdrew 55.4 BTC. 6.5 BTC was confiscated from the Client’s account at the time of account closure (see reasoning below).
Why was the Client asked to submit KYC documents?T&C 9.2 “Sportsbet.io reserve the right to carry out additional KYC verification procedures for any withdrawals exceeding the equivalent of 1 Bitcoin or €2000 as regulated by our gaming license.”
T&C 7.4 “We reserve the right to block / delay processing of withdrawal requests until requested copies of valid photographic identification, proof of address and/or credit/debit card are provided to our satisfaction (KYC).”
The Client’s betting and transaction patterns gave the Operator a reasonable suspicion that the Client’s activity may be fraudulent. This, as standard, triggered an in-depth investigation which found the following:
a) After depositing the Client always started to play high-stakes blackjack hands and stopped at the point when the deposit was confirmed in the Blockchain. This kind of behaviour strongly suggests an attempt to Double Spend.
After the investigation the Operator exercised its right to carry out a KYC (Know your Customer) procedure.
Why did the Client fail the KYC procedure?Operators Player Safety and Assurance Department carried out the document review on two occasions (03.04.2017 and 13.04.2017).
The following issues were found regarding the provided documents:
- Visual signs suggesting that the document is forged and/or electronically manipulated. The Client submitted a passport that was closely examined with senior in-house Fraud Engineer, who concluded that vital pieces of information were missing that should be present on that specific passport.
- Mismatched information was present on the document itself, (e.g. showing a different document number at various different places on the same document).
- The Client submitted two separate documents for ID verification. In several places the information did not correlate correctly between documents (e.g two different signatures).
- The address that was provided to the Operator cannot be found using any of the public databases.
- The utility bill provided by the Client was over 3 months old and therefore of low trust.
Due to the fact that the matter involves delicate personal data we are not able to disclose the documents received to the public. However, we are prepared to disclose all evidence to a neutral third party if that is requested and providing that we have a permission of the Client to do so.
Why was Clients account disabled?T&C 3.10 “We have the right to carry out “KYC” (Know Your Customer) verification procedures and access to your Member Account may be blocked or closed if we determine that you have supplied false or misleading information.”
T&C 16.1 “Without restricting our ability to rely on other remedies that may be available to us, we may suspend and/or terminate your account, cancel any outstanding bets and/or confiscate any or all funds in your account at our absolute discretion if: (i) we suspect that you are engaging in money laundering, illegal or other fraudulent activity while using our Website; or
(vi) we determine that you are breaching any term of these Terms and Conditions;”
Considering the unsatisfactory result of the KYC procedure paired with a strong suspicion of fraudulent activity, the Operator exercised its right to suspend the Client’s account; therefore, the Client was deemed undesirable for the Operator.
Ultimately the reasons behind the suspension of the account and the foreclosure of funds were:
a) The Client provided false and misleading information during the KYC procedure
b) There was a strong suspicion (over reasonable doubt) that the Client was engaged in fraudulent activity regarding gameplay and transactions
Why was 6.5 BTC funds confiscated from Clients account?T&C 16.1 “Without restricting our ability to rely on other remedies that may be available to us, we may suspend and/or terminate your account, cancel any outstanding bets and/or confiscate any or all funds in your account at our absolute discretion if: (i) we suspect that you are engaging in money laundering, illegal or other fraudulent activity while using our Website; or
(vi) we determine that you are breaching any term of these Terms and Conditions;”
T&C 16.2 “You acknowledge that Sportsbet.io shall be the final decision-maker as to whether you have violated rules, terms or conditions in a manner that results in suspension or permanent barring from participation in our Websites.”
Considering:
a) The Client provided false and misleading information during the KYC procedure
b) Strong suspicion (over reasonable doubt) of fraudulent activity regarding transactions and gameplay
c) The fact that the Client had already received a 12.9BTC profit via fraudulent gameplay from the Operator
The Operator exercised its right to confiscate 6.5 BTC from the Clients account.
