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July 09, 2017, 07:06:05 AM |
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Hello,
Right now there is NO accountability whatsoever for websites/marketplaces such as Paxful.com and Localbitcoins.com. It seems that these websites believe they can do what they want to whoever they choose. They have their own sets of rules that their users must follow. Whose to say that they follow their own rules or even the laws in the country that they operate?
Here is a clear example of what I am talking about:
There is a trader on Paxful.com with over 3700+ positive feedback rating and his account is over a year old. This trader is my ex business partner and college friend that I have known for over 10 years. On his profile you will see two sets of advertisements; selling bitcoin for different types of gift cards and buying bitcoin for different types of gift cards. The advertisements are basically "Reselling" these gift cards. A user will open his advertisement and send him a gift card. He will tell that user to wait for a while until another user opens his advertisement to buy the gift card from him. His rates are set so that he makes a good %. Very understandable - this is the business he learned from me and I have been doing this for years even before BTC was around (ever heard of Perfect Money?).
The problem is Paxful.com's rules make it very clear: NO RESELLING OR MIDDLEMANNING OF GIFT CARDS
Many new accounts I have made and traded successfully on have been banned and my btc stolen from me because of this rule. However my ex business partner is ALLOWED to middleman and resell gift cards every day. If you were to see his negative feedbacks - he has stolen many gift cards from people by telling them to send to him on ICQ and Jabber.
If someone was to look at his buy and sell trades you would see the exact same gift card being resold at a higher rate. Paxful obviously knows this and allows it to occur... only a few traders on that website are allowed to do this.
Another example of why these websites need oversight is because if you are BANNED and have your bitcoins withheld from you there is very little explanation as to why. You are likely never to get your bitcoin back regardless of the situation.
Let's not even talk about where these gift cards come from and the fact that the websites allow these gift cards to be traded. 99% of the gift cards my ex business partner trades are from Romanians who scam americans on craigslist, offerup, facebook marketplace etc. This website exchangecurrencyzone.com has been dealing with them long before you bitcoin guys were around. There are forum posts there dating back long before bitcoin had started.
All the money that these websites make off our fees and nobody really gives a damn about what they do. If you have an old reputable account and you make them money its a free for all.
So I am looking for a partner who wants to start an organization/service dedicated to holding these websites accountable and mediating if necessary. I had a domain and a small site going but it was very difficult to make it the way I wanted.
I think its time someone holds these sites accountable and allow the end users voice to be heard more clearly.
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