Legal Action against Bittrex exchange: a crowd funding proposal

[aliashraf]

Hello,

I am experiencing (alongside possibly thousands of people) a major fraud case as a victim. Most of the direct victims (Yes, there are indirect victims as well) have not access to US legislation resources and the perpetrator (Bittrex exchange)  is using this advantage to remain irresponsible and rude.

As of 'indirect victims' mentioned above: The perpetrator is damaging the whole cryptocurrency ecosystem by its action and the whole community should be considered as victims.


My proposal:
A descent bitcoiner, a legendary member of this site for instance, being a citizen of USA can hire an experienced lawyer and file a case against this "exchange" the costs should be covered by donations to a bitcoin address to which he has access (he will donate any extra coins to a charity foundation). Bittrex should be forced to compensate any damages and is to be shut down forever.

This procedure can take place in similar cases when any centralized action abuses cryptocurrency environment and runs scam schemas.

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[raoulsergia]

nah i dont think so.

exchanges are not required to be complaint to anyone and a court will rule that. unless you can show some serious proof as evidence to back up your claims of fraud

simply suggesting the exchange shorted a coin or two doesnt help im afraid.
crypto is largely unregulated and any money you put in here is really at your own risk.

[aliashraf]

nah i dont think so.

exchanges are not required to be complaint to anyone and a court will rule that. unless you can show some serious proof as evidence to back up your claims of fraud

simply suggesting the exchange shorted a coin or two doesnt help im afraid.
crypto is largely unregulated and any money you put in here is really at your own risk.

Objections:

1- It is not about 1 or two coins, Bittrex has recently, disabled thousands of accounts and blocked millions of dollars of deposits, in her interest.

2-There is no 'unregulated' business other than drug trafficking and alike, absence of specific regulations is not an excuse for a business to break general laws. Committing fraud and stealing people's assets is a general crime and can be prosecuted under general law.

3-In the cryptocurrency case, we already have laws that specifically identifies bitcoin and altcoins as 'asset'. Nobody is entitled to fraudulently play with people's assets and violating their ownership.

 

[raoulsergia]

nah i dont think so.

exchanges are not required to be complaint to anyone and a court will rule that. unless you can show some serious proof as evidence to back up your claims of fraud

simply suggesting the exchange shorted a coin or two doesnt help im afraid.
crypto is largely unregulated and any money you put in here is really at your own risk.

Objections:

1- It is not about 1 or two coins, Bittrex has recently, disabled thousands of accounts and blocked millions of dollars of deposits, in her interest.

2-There is no 'unregulated' business other than drug trafficking and alike, absence of specific regulations is not an excuse for a business to break general laws. Committing fraud and stealing people's assets is a general crime and can be prosecuted under general law.

3-In the cryptocurrency case, we already have laws that specifically identifies bitcoin and altcoins as 'asset'. Nobody is entitled to fraudulently play with people's assets and violating their ownership.

 

Im just speaking out of experience of course. Look at poloniex which is several times worse than bittrex, people have had millions of $$ stuck in polo for months.
Remember the FCT withdrawal issues, people hit withdraw on polo but the coins never appeared for weeks. Support ofcourse wasnt responding.

Many of these users threatened legal action, yet there is nothing there as of now.

Your best bet is to write to BBB or SEC and hope thinly for them to respond. Most of the time they see something related to crypto and ignore the entire complaint


About disabling accounts and such, bittrex will always claim they were not comfortable with KYC and had to disable the withdrawals. They can hide under this excuse for any illegal act they commit.
It will be a huge task to show otherwise that the withdrawal funds were more important than KYC

[aliashraf]

nah i dont think so.

exchanges are not required to be complaint to anyone and a court will rule that. unless you can show some serious proof as evidence to back up your claims of fraud

simply suggesting the exchange shorted a coin or two doesnt help im afraid.
crypto is largely unregulated and any money you put in here is really at your own risk.

Objections:

1- It is not about 1 or two coins, Bittrex has recently, disabled thousands of accounts and blocked millions of dollars of deposits, in her interest.

2-There is no 'unregulated' business other than drug trafficking and alike, absence of specific regulations is not an excuse for a business to break general laws. Committing fraud and stealing people's assets is a general crime and can be prosecuted under general law.

3-In the cryptocurrency case, we already have laws that specifically identifies bitcoin and altcoins as 'asset'. Nobody is entitled to fraudulently play with people's assets and violating their ownership.

 

Im just speaking out of experience of course. Look at poloniex which is several times worse than bittrex, people have had millions of $$ stuck in polo for months.
Remember the FCT withdrawal issues, people hit withdraw on polo but the coins never appeared for weeks. Support ofcourse wasnt responding.

Many of these users threatened legal action, yet there is nothing there as of now.

Your best bet is to write to BBB or SEC and hope thinly for them to respond. Most of the time they see something related to crypto and ignore the entire complaint


About disabling accounts and such, bittrex will always claim they were not comfortable with KYC and had to disable the withdrawals. They can hide under this excuse for any illegal act they commit.
It will be a huge task to show otherwise that the withdrawal funds were more important than KYC

1- I think it is not about complaining to BBB or SEC (as Bittrex is  not 'regulated') so, we should go directly to a court and nowhere else. As I have argued above this is not a violation of some SEC regulations, (there exists no such regulations) but can be categorized and prosecuted as a fraud.

2- They can't defend under the KYC article. Most of the stolen accounts are strongly verified and Bittrex is responsible for the KYC procedure compliance and not it customers. Obviously you can not accept people's deposits under a certain terms and conditions and then steal their funds saying 'Oh we don't know you, we are committed to KYC'

[TrumpD]

Could it be that they are under scrutiny from LE and such? This may explain the recent shady behavior. Too many accusations against them recently, glad I don't have any coins in my Bitterex accounts.

[Coffee135]

I see no reason for joy. This is only one of many exchanges. This can happen with everyone. Where is the guarantee that you will not have coins in the accounts of another exchange which will do well? One of the problems of bitcoin is that we are forced to make transactions based on trust alone. Will always be a lot of scams that want to steal your coins.

[buwaytress]

@OP. Before you even think of pursuing legal action, I'd advise you to clarify what exactly happened (I can't understand what happened from your first post) and then strengthen your case first with evidence. Lots of it. And if you're talking about getting others to come under a single complaint, you're talking about class action lawsuits. Now I do not know the law well enough but I am aware that Poloniex recently strengthened their Terms of Use to explicitly say that any user who signs up and uses their platform waives their right to such legal action. My strong suspicion is that Bittrex is no different. By signing up and using these exchanges, you probably signed off a lot of rights, if the ToS stands.

I'm not here to argue about the ethics of such agreements, just here to warn you that you should prepare yourself with clear evidence before you can do anything. Also, I strongly urge you to remain polite and courteous in your communications with them. I've seen your posts on other threads and that's not going to help you resolve anything quicker, trust me.

[Schnecke]

You cant be serious. Bittrex just blocked thousand of accounts for no reason at all, people are going crazy everywhere, and you dont know what he is talking about?

https://twit       ter.com/hashtag/bittrexexchange?f=tweets&vertical=default&src=hash

How much evidence do you need? Take a look at the "scam"-section of this forum.

edit: srsly? this forum is blocking links to TWITTER?

[aliashraf]

@OP. Before you even think of pursuing legal action, I'd advise you to clarify what exactly happened (I can't understand what happened from your first post) and then strengthen your case first with evidence. Lots of it. And if you're talking about getting others to come under a single complaint, you're talking about class action lawsuits. Now I do not know the law well enough but I am aware that Poloniex recently strengthened their Terms of Use to explicitly say that any user who signs up and uses their platform waives their right to such legal action. My strong suspicion is that Bittrex is no different. By signing up and using these exchanges, you probably signed off a lot of rights, if the ToS stands.

I'm not here to argue about the ethics of such agreements, just here to warn you that you should prepare yourself with clear evidence before you can do anything. Also, I strongly urge you to remain polite and courteous in your communications with them. I've seen your posts on other threads and that's not going to help you resolve anything quicker, trust me.

Obviously, my account, a verified account,  has been disabled without any excuse and I have not access to my funds to withdraw or use in trade. I have explained the details in the OP, and it is very important to take the following facts in consideration:
1- I am not alone, possibly hundreds or thousands of people are experiencing a same problem with Bittrex.
2- It happened at the very moment price surge started.
3- Before this happens, occasionally, they have put my wallets, like others, in a temporarily disabled state named 'maintenance mode' again in the critical market periods.
my suggestion: This site is  a sophisticated scam that shows its face to portions of their user base in critical market situations.

I afraid there is nothing in their terms of service to allow them seizing deposits and if they think they can use it to commit fraud, they are simply wrong, they can't! Actually it makes everything for them much worse, it is a more serious crime to convince people sign a fraudulent agreement in which they give you money and the right to not paying it back in anyway while you are pretending to be an exchange, an escrow.

Bittrex has used the title "Exchange" and shamelessly continues using it now, they are not allowed to put ambiguous statements in their ToS misleadingly. It is not how things work in the financial services sector.

[figmentofmyass]

@OP. Before you even think of pursuing legal action, I'd advise you to clarify what exactly happened (I can't understand what happened from your first post) and then strengthen your case first with evidence. Lots of it. And if you're talking about getting others to come under a single complaint, you're talking about class action lawsuits. Now I do not know the law well enough but I am aware that Poloniex recently strengthened their Terms of Use to explicitly say that any user who signs up and uses their platform waives their right to such legal action. My strong suspicion is that Bittrex is no different. By signing up and using these exchanges, you probably signed off a lot of rights, if the ToS stands.

I'm not here to argue about the ethics of such agreements, just here to warn you that you should prepare yourself with clear evidence before you can do anything. Also, I strongly urge you to remain polite and courteous in your communications with them. I've seen your posts on other threads and that's not going to help you resolve anything quicker, trust me.

they've basically instituted mandatory verification (with passport/driver's license + selfie -- good recipe for identity theft) for accounts valued higher than $1,000. with such a low threshold, their entire userbase is now basically subject to these new rules. they didn't give any prior notification that this would happen. and with a userbase as large as theirs, i imagine it could take months to verify everyone.

in the meantime, no one can trade/hedge value on their coins or withdraw their money. and people with previously verified accounts are also having their accounts disabled, which is pretty fishy. whatever is happening, it's being carried out by bittrex in an extremely unprofessional manner. i'd be curious to know what the rights of creditors are in this situation, when the custodian is seemingly blocking access to funds based on arbitrary conditions, which is also causing significant financial damages to victims, because they cannot withdraw or trade as normal.

they must be getting a lot of pressure from regulators/law enforcement. their twitter also says they are based in seattle... is that true? i wonder how wise that is given that washington state is one of the only states that regulates cryptocurrencies, hence why bitfinex and poloniex stopped offering services to washington residents.

[jekjekman]

@OP. Before you even think of pursuing legal action, I'd advise you to clarify what exactly happened (I can't understand what happened from your first post) and then strengthen your case first with evidence. Lots of it. And if you're talking about getting others to come under a single complaint, you're talking about class action lawsuits. Now I do not know the law well enough but I am aware that Poloniex recently strengthened their Terms of Use to explicitly say that any user who signs up and uses their platform waives their right to such legal action. My strong suspicion is that Bittrex is no different. By signing up and using these exchanges, you probably signed off a lot of rights, if the ToS stands.

I'm not here to argue about the ethics of such agreements, just here to warn you that you should prepare yourself with clear evidence before you can do anything. Also, I strongly urge you to remain polite and courteous in your communications with them. I've seen your posts on other threads and that's not going to help you resolve anything quicker, trust me.

Obviously, my account, a verified account,  has been disabled without any excuse and I have not access to my funds to withdraw or use in trade. I have explained the details in the OP, and it is very important to take the following facts in consideration:
1- I am not alone, possibly hundreds or thousands of people are experiencing a same problem with Bittrex.
2- It happened at the very moment price surge started.
3- Before this happens, occasionally, they have put my wallets, like others, in a temporarily disabled state named 'maintenance mode' again in the critical market periods.
my suggestion: This site is  a sophisticated scam that shows its face to portions of their user base in critical market situations.

I afraid there is nothing in their terms of service to allow them seizing deposits and if they think they can use it to commit fraud, they are simply wrong, they can't! Actually it makes everything for them much worse, it is a more serious crime to convince people sign a fraudulent agreement in which they give you money and the right to not paying it back in anyway while you are pretending to be an exchange, an escrow.

Bittrex has used the title "Exchange" and shamelessly continues using it now, they are not allowed to put ambiguous statements in their ToS misleadingly. It is not how things work in the financial services sector.

I think what they're doing is trying to save their but in case enforcers accuse them of laundering funds. They are requiring ID's to verify the identity of account owner's to point to someone in case this scenario happens.

So as long as the source of your coins are from legitimate sources no need to worry about it.

Asia's wallet/exchange provider "coins" are doing this account verification from the start. They are even asking for a selfie with your ID's

[aliashraf]

{...}
Obviously, my account, a verified account,  has been disabled without any excuse and I have not access to my funds to withdraw or use in trade. I have explained the details in the OP, and it is very important to take the following facts in consideration:
1- I am not alone, possibly hundreds or thousands of people are experiencing a same problem with Bittrex.
2- It happened at the very moment price surge started.
3- Before this happens, occasionally, they have put my wallets, like others, in a temporarily disabled state named 'maintenance mode' again in the critical market periods.
my suggestion: This site is  a sophisticated scam that shows its face to portions of their user base in critical market situations.

I afraid there is nothing in their terms of service to allow them seizing deposits and if they think they can use it to commit fraud, they are simply wrong, they can't! Actually it makes everything for them much worse, it is a more serious crime to convince people sign a fraudulent agreement in which they give you money and the right to not paying it back in anyway while you are pretending to be an exchange, an escrow.

Bittrex has used the title "Exchange" and shamelessly continues using it now, they are not allowed to put ambiguous statements in their ToS misleadingly. It is not how things work in the financial services sector.

I think what they're doing is trying to save their but in case enforcers accuse them of laundering funds. They are requiring ID's to verify the identity of account owner's to point to someone in case this scenario happens.

So as long as the source of your coins are from legitimate sources no need to worry about it.

Asia's wallet/exchange provider "coins" are doing this account verification from the start. They are even asking for a selfie with your ID's

As I've mentioned before, my account is strongly verified, long time ago and I think if it was about law enforcers who may push for more restricted verification process, they would ban deposits for the accounts of interest and not withdrawal! They are little liars, Bittrex owners, they use this as a leverage to fulfil their interests and nothing more. Putting your hands on millions of dollars of users' funds, saying 'We are so cautious about law enforcement and regulators that have blocked your access to your assets' it is just obscenity, they are using our deposits to trade in the boom times.

[buwaytress]

You cant be serious. Bittrex just blocked thousand of accounts for no reason at all, people are going crazy everywhere, and you dont know what he is talking about?

https://twit       ter.com/hashtag/bittrexexchange?f=tweets&vertical=default&src=hash

How much evidence do you need? Take a look at the "scam"-section of this forum.

edit: srsly? this forum is blocking links to TWITTER?

I'm serious on the point of gathering clear, set-by-step chronological evidence that presents the case (single or multiple) in a logical way. I'm not knowledgeable in legal matters but I am certain this is the only way to proceed properly. Act swiftly, documenting all the steps with screenshots-email comms, support transcripts, anything.

It's not evidence that I need, obviously, but that OP needs if he wants to pursue legal action. I was simply trying to help him on his way. This forum and its users won't be able to arbitrate no matter how much evidence is posted here and nothing will happen no matter if "people are going crazy everywhere".

[aliashraf]

You cant be serious. Bittrex just blocked thousand of accounts for no reason at all, people are going crazy everywhere, and you dont know what he is talking about?

https://twit       ter.com/hashtag/bittrexexchange?f=tweets&vertical=default&src=hash

How much evidence do you need? Take a look at the "scam"-section of this forum.

edit: srsly? this forum is blocking links to TWITTER?

I'm serious on the point of gathering clear, set-by-step chronological evidence that presents the case (single or multiple) in a logical way. I'm not knowledgeable in legal matters but I am certain this is the only way to proceed properly. Act swiftly, documenting all the steps with screenshots-email comms, support transcripts, anything.

It's not evidence that I need, obviously, but that OP needs if he wants to pursue legal action. I was simply trying to help him on his way. This forum and its users won't be able to arbitrate no matter how much evidence is posted here and nothing will happen no matter if "people are going crazy everywhere".

I appreciate your commitment. It is worth mentioning that Bittrex operates globally and it is committing fraud against people from all around the globe. Now to take legal action in Seattle, it is necessary to have an agent in  Washington to hire a lawyer and submit a lawsuit.

I think people who has suffered by Bittrex are ready to participate and cover the costs by making donations. I am ready to donate up to 1000$ on my part.

[aliashraf]

They say it is an MTGox situation here:
https://www.cointelegraph.com/news/bitcoin-altcoin-exchange-bittrex-eyed-with-suspicion-due-to-thousands-of-mysterious-account-closings

bad news

But I think this is not about a software flaw, it is about greed and abuse. They should be present in a court, they have gambled with user's deposits. An exchange operator is not allowed to trade on the same exchange it operates. It is conflict of interests and abuse of user deposits. Now they have blocked out people to avoid withdrawals which can not accomplish.

[Colorblind]

They say it is an MTGox situation here:
https://www.cointelegraph.com/news/bitcoin-altcoin-exchange-bittrex-eyed-with-suspicion-due-to-thousands-of-mysterious-account-closings

bad news

But I think this is not about a software flaw, it is about greed and abuse. They should be present in a court, they have gambled with user's deposits. An exchange operator is not allowed to trade on the same exchange it operates. It is conflict of interests and abuse of user deposits. Now they have blocked out people to avoid withdrawals which can not accomplish.

Does Bittrex publish their cold wallet storage address in order to prove solvancy?

[Lieldoryn]

I never used the services of this exchange. There are many people who say this is a good resource. Many people have many opinions. It seems to me that the best option is your warning. I doubt that you can get your money back. But you can help others avoid losses.

[riils]

This is truly horrifying. Look at the last post Bittrex has on their Facebook page.

Every 5 minutes someone is posting a new comment begging for Bittrex to review their support ticket and unlock their funds. There are thousands of people affected by this scam.

Every tweet that is made by either Bittrex or its employees gets hundreds of comments of victims pleading for help to unlock their funds.

[rehydrogenated]

@OP. Before you even think of pursuing legal action, I'd advise you to clarify what exactly happened (I can't understand what happened from your first post) and then strengthen your case first with evidence. Lots of it. And if you're talking about getting others to come under a single complaint, you're talking about class action lawsuits. Now I do not know the law well enough but I am aware that Poloniex recently strengthened their Terms of Use to explicitly say that any user who signs up and uses their platform waives their right to such legal action. My strong suspicion is that Bittrex is no different. By signing up and using these exchanges, you probably signed off a lot of rights, if the ToS stands.

I'm not here to argue about the ethics of such agreements, just here to warn you that you should prepare yourself with clear evidence before you can do anything. Also, I strongly urge you to remain polite and courteous in your communications with them. I've seen your posts on other threads and that's not going to help you resolve anything quicker, trust me.

they've basically instituted mandatory verification (with passport/driver's license + selfie -- good recipe for identity theft) for accounts valued higher than $1,000. with such a low threshold, their entire userbase is now basically subject to these new rules. they didn't give any prior notification that this would happen. and with a userbase as large as theirs, i imagine it could take months to verify everyone.

in the meantime, no one can trade/hedge value on their coins or withdraw their money. and people with previously verified accounts are also having their accounts disabled, which is pretty fishy. whatever is happening, it's being carried out by bittrex in an extremely unprofessional manner. i'd be curious to know what the rights of creditors are in this situation, when the custodian is seemingly blocking access to funds based on arbitrary conditions, which is also causing significant financial damages to victims, because they cannot withdraw or trade as normal.

they must be getting a lot of pressure from regulators/law enforcement. their twitter also says they are based in seattle... is that true? i wonder how wise that is given that washington state is one of the only states that regulates cryptocurrencies, hence why bitfinex and poloniex stopped offering services to washington residents.

Without a doubt the government is setting up to tax the living crap out of bitcoin gains. To do that they need to be able to track the users and have a verified identity and address. IMO this is long overdue. People not paying taxes is a problem.