Bitstamp Acting Very Strange : Heads Up

[Alty]

Posting here to get some attention and to warn others of a potential Bitstamp problem.

They are not processing $XXXX withrdawals

NOT responding to support tickets.

They are not allowing medium to large BTC withdrawals for many people

I tried making $9000 withdrawal, got told week later my bank account details were not correct. My bank details had not changed since the last few withdrawals.

So I input all details again, and tried again. Couple of days later I got the following message from Bitstamp.

.....................

We received your withdrawal request. As your withdrawal request met some of our volume and frequency thresholds, we will have to kindly ask you to help us better understand the nature of your relationship with Bitstamp. In order to do so, we require that an additional KYC (know your customer) procedure is completed before we can proceed with the processing of your transfer.

We kindly ask you to send us a high resolution image double page of your international passport and answer the following KYC questionnaire:

1. How did you learn about Bitcoin?
2. The purpose of trading on Bitstamp?
3. What is the origin of the deposited Bitcoins? If mining, please specify your hardware specifications and submit a receipt or an invoice for your mining equipment.
4. What are your future plans and activities planned on our exchange?
5. Do you plan more withdrawals in the future?
6. Which bank are you using? Please provide the complete address and SWIFT code.
7. What is the source of the funds which you are depositing to your Bitstamp account? Please provide any financial documentation which can confirm how the funds sent to your Bitstamp account were acquired.

We kindly ask you to submit your answers and documents in a reply to this ticket.

...................................

So I provide them everything they ask and try to withdraw again.

A couple of days goes by and nothing.

Not even response to support tickets, twitter, pm on forum etc etc.

Blocked from withdrawing Bitcoin too!

Something is not right and an explanation is needed.

Bitstamp have problems, this could cause a big shoot in price.

There are two threads in the sub sections about this with other users reporting similar problems with Bitstamp

https://bitcointalk.org/index.php?topic=476614.0

https://bitcointalk.org/index.php?topic=38711.1200

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[Alty]

Finally got a response : automated one no doubt.


We sincerely apologize for the late reply.

thank you for your cooperation. We have instructed our administration to further process your withdrawal request. Please be advised that we may further contact you if additional KYC checking be necessary.

If you have any additional questions, please feel free to contact us again.

Best regards

[trdiablo]

I have the exact same issue, never had any problems with BitStamp before. This week tried to withdraw $xxxxx and asked for additional KYC info.
Given all info they possibly need and havent heard anything back since 3 days now.

Is BitStamp secretly owned by Gox? wtf is going on

[HerrAndreas]

I have the exact same issue, never had any problems with BitStamp before. This week tried to withdraw $xxxxx and asked for additional KYC info.
Given all info they possibly need and havent heard anything back since 3 days now.

Is BitStamp secretly owned by Gox? wtf is going on

maybe you hit some limits that make it likely to be suspected for money laundry or other offences which can cost any exchange their existance if big enough and discovered.

I tried withdrawing btc today and had no difficulties at all (9 times). but mind you I am not talking about btc amounts worth tens of thousands of dollars/euros here.

wish you luck and patience and justified trust.

[Pangia]

I have the exact same issue, never had any problems with BitStamp before. This week tried to withdraw $xxxxx and asked for additional KYC info.
Given all info they possibly need and havent heard anything back since 3 days now.

Is BitStamp secretly owned by Gox? wtf is going on

Crazier things have happened and it wouldn't be surprising.

[GigaCoin]

I've reported on this in speculation and on the same thread a many ppl have confirmed experiencing the same, seems like a "Stealth" withdrawal block, i've also had some people i know tell me they got the email.

https://bitcointalk.org/index.php?topic=477323.0

[Rannasha]

Hazek (who works for Bitstamp) has clarified some things in the official Bitstamp thread:
https://bitcointalk.org/index.php?topic=38711.msg5264408#msg5264408

[bananas]

Bitstamp is lying. Just lying.

KYC just means asking for a ID document, properly verifying it and communicating any red flags on transactions or something to the authorities. The financial institution, which Bitstamp is not, can not act as an authority. They are acting and intimidating customers as if they were the federal police.

So Bitstamp is totally lying about it even if they have to comply to KYC, which i think they don't.

And why the very small amount of 9 thousand dollar from an already indentified customer would give any red flags regarding illegal activity KYC is aimed at? BIG LOL.

[jaybny]

i made a withdrawal 30 minutes ago. no problems

[Alty]

i made a withdrawal 30 minutes ago. no problems

As far as I know this is not affecting everybody, and doesn't seem to be affecting anything sub 10 btc or $XXXX

To try and get a better picture, how much approx did you withdraw?

[jaybny]

i made a withdrawal 30 minutes ago. no problems

As far as I know this is not affecting everybody, and doesn't seem to be affecting anything sub 10 btc or $XXXX

To try and get a better picture, how much approx did you withdraw?

only 2btc

[repentance]

Asking for information about the origin of funds is an AML thing.  It's a legitimate thing done by many financial institutions when the system flags a transaction as "suspicious" and the answers given to such questions often determine whether or not a formal report is made to financial intelligence organisations.

It's possible that they're being overly cautious at the moment regarding possible money laundering activity.  They can't really afford not to be as it's the thing most likely to bring down legitimate services as the fallout from SR1 continues.  

None of these services are going to stay in business for any length of time without being AML/KYC compliant.  Annoying as it might be to feel like your transactions are being unfairly scrutinised, it's preferable to going to withdraw your funds only to find that the domain has been seized by authorities and all funds frozen.

KYC just means asking for a ID document, properly verifying it and communicating any red flags on transactions or something to the authorities. The financial institution, which Bitstamp is not, can not act as an authority. They are acting and intimidating customers as if they were the federal police.

So Bitstamp is totally lying about it even if they have to comply to KYC, which i think they don't.

And why the very small amount of 9 thousand dollar from an already indentified customer would give any red flags regarding illegal activity KYC is aimed at? BIG LOL.

Many Bitcoin enterprises try to be AML/KYC compliant in the hope that if they come to the attention of authorities they won't get prosecuted for money laundering in addition to being fined for operating their service without the appropriate licences.

The bare minimum KYC required and the enhanced KYC which is required if something flags the system as "suspicious" are two different things.  Any financial service can ask for additional KYC information at any time.  Enhanced KYC is extremely common.  Financial institutions develop their own risk management systems and tend to err on the side of caution because they're facing massive fines if they fail to take adequate measures to detect money laundering.  Your remedy if you don't like one service's policies is to use another service.

[Bit_Happy]

Sad, but true...This is the Dawn of the age of Big Compliance.

Asking for information about the origin of funds is an AML thing.  It's a legitimate thing done by many financial institutions when the system flags a transaction as "suspicious" and the answers given to such questions often determine whether or not a formal report is made to financial intelligence organisations.

It's possible that they're being overly cautious at the moment regarding possible money laundering activity.  They can't really afford not to be as it's the thing most likely to bring down legitimate services as the fallout from SR1 continues. 

None of these services are going to stay in business for any length of time without being AML/KYC compliant.  Annoying as it might be to feel like your transactions are being unfairly scrutinised, it's preferable to going to withdraw your funds only to find that the domain has been seized by authorities and all funds frozen.

[ab8989]

Many Bitcoin enterprises try to be AML/KYC compliant in the hope that if they come to the attention of authorities they won't get prosecuted for money laundering in addition to being fined for operating their service without the appropriate licences.

Lets arrange the things said in this sentence in a different order

>> in addition to being fined for operating their service without the appropriate licences.

Bitstamp is likely operating without appropriate licenses.

>> in the hope that if they come to the attention of authorities they won't get prosecuted

Bistamp is likely trying their best not to come to the attention of authorities in any way, shape or form because it they ever do, they will probably be shut down at the spot for operating without license.

>> try to be AML/KYC compliant

They cannot even try to be AML/KYC compliant without contacting the authorities.

>> Annoying as it might be to feel like your transactions are being unfairly scrutinised, it's preferable to going to withdraw your funds only to find that the domain has been seized by authorities and all funds frozen

I would think everyone would like to get their withdrawal processed right NOW instead of waiting for weeks or months for it during which time the exchange could be seized by authorities or go bankrupt or both.

>>None of these services are going to stay in business for any length of time without being AML/KYC compliant

None of these services are going to stay in business for any length of time without having appropriate licenses.

>>And why the very small amount of 9 thousand dollar from an already identified customer would give any red flags regarding illegal activity KYC is aimed at? BIG LOL.

The checking or origin of funds is supposed to take place during DEPOSITING of the funds. Not at withdrawing. When I have deposited cash slightly above 10kEUR into banks they have asked me about the source of the funds. That is okay. That is also the moment when the banks can easily decline the deposit for any reason whatsoever. I have numerous times withdrawn money from banks in the range of 100k-200kEUR and never been asked about anything. I do not think banks are allowed to confiscate any money without having the authorities intimately involved in the process and when authorities are involved in an inquiry about a customer the banks are not allowed to tip the customer about this ongoing inquiry by authorities in any manner including declining the withdrawal.

Lets imagine a situation if some authority comes to an exchange to bust them for operating without appropriate licenses either before or after they have gone bankrupt. Which additional things are going to give the exchange most additional grief:

A) If the illegal exchange has determined that some customers are laundering drug money and the exchange has not promptly informed the authorities with full disclosure about their operation as an illegal exchange and the customer relation they have but instead have stolen the money by themselves which they without any court order have by themselves declared as probable drug money and they are keeping the possession of that money themselves.

B) The exchange has performed normal KYC paperwork at account opening time and performed additional checks at money depositing time but have not done any extra checking when customer wants to close an account nor stolen customer funds when they want to withdraw.

My bet is that the option A is about the most incriminating thing the exchange can do in this particular situation and bring them the most grief with law, much more than the option B which brings nothing extra in addition to the basic problem of operating without appropriate licenses.

Actually I think there is an option C which also looks very bad for the illegal exchange:

C) The exchange has taken specific interest in some customer but has not contacted authorities but instead some backcountry adhock bullshit procedure they have resumed business and later this person turns up to be a drug-baron.

This option C looks much worse to the illegal exchange than option B of not noticing anything suspicious in the first place.

If anyone of your customers turns up to be a drug-baron the first thought for a possible defense is to deny any knowledge of anything. You do not want to do things that decline yourself the option of using this kind of defense. And if you know you have drug-barons as customers and you are unable to contact authorities you want the drug-baron go away, shutdown their account and withdraw all money and be gone. That is the way of least consequences to the business.

[crazy_rabbit]

seems like it's working again.

[Totscha]

http://www.coindesk.com/bitstamp-restores-withdrawals-following-security-scare/

There were some phishing attack attempts. They reportedly took a ‘better-safe-than-sorry’ approach.

[eoJ]

Many Bitcoin enterprises try to be AML/KYC compliant in the hope that if they come to the attention of authorities they won't get prosecuted for money laundering in addition to being fined for operating their service without the appropriate licences.

Lets arrange the things said in this sentence in a different order

>> in addition to being fined for operating their service without the appropriate licences.

Bitstamp is likely operating without appropriate licenses.

>> in the hope that if they come to the attention of authorities they won't get prosecuted

Bistamp is likely trying their best not to come to the attention of authorities in any way, shape or form because it they ever do, they will probably be shut down at the spot for operating without license.

>> try to be AML/KYC compliant

They cannot even try to be AML/KYC compliant without contacting the authorities.

>> Annoying as it might be to feel like your transactions are being unfairly scrutinised, it's preferable to going to withdraw your funds only to find that the domain has been seized by authorities and all funds frozen

I would think everyone would like to get their withdrawal processed right NOW instead of waiting for weeks or months for it during which time the exchange could be seized by authorities or go bankrupt or both.

>>None of these services are going to stay in business for any length of time without being AML/KYC compliant

None of these services are going to stay in business for any length of time without having appropriate licenses.

>>And why the very small amount of 9 thousand dollar from an already identified customer would give any red flags regarding illegal activity KYC is aimed at? BIG LOL.

The checking or origin of funds is supposed to take place during DEPOSITING of the funds. Not at withdrawing. When I have deposited cash slightly above 10kEUR into banks they have asked me about the source of the funds. That is okay. That is also the moment when the banks can easily decline the deposit for any reason whatsoever. I have numerous times withdrawn money from banks in the range of 100k-200kEUR and never been asked about anything. I do not think banks are allowed to confiscate any money without having the authorities intimately involved in the process and when authorities are involved in an inquiry about a customer the banks are not allowed to tip the customer about this ongoing inquiry by authorities in any manner including declining the withdrawal.

Lets imagine a situation if some authority comes to an exchange to bust them for operating without appropriate licenses either before or after they have gone bankrupt. Which additional things are going to give the exchange most additional grief:

A) If the illegal exchange has determined that some customers are laundering drug money and the exchange has not promptly informed the authorities with full disclosure about their operation as an illegal exchange and the customer relation they have but instead have stolen the money by themselves which they without any court order have by themselves declared as probable drug money and they are keeping the possession of that money themselves.

B) The exchange has performed normal KYC paperwork at account opening time and performed additional checks at money depositing time but have not done any extra checking when customer wants to close an account nor stolen customer funds when they want to withdraw.

My bet is that the option A is about the most incriminating thing the exchange can do in this particular situation and bring them the most grief with law, much more than the option B which brings nothing extra in addition to the basic problem of operating without appropriate licenses.

Actually I think there is an option C which also looks very bad for the illegal exchange:

C) The exchange has taken specific interest in some customer but has not contacted authorities but instead some backcountry adhock bullshit procedure they have resumed business and later this person turns up to be a drug-baron.

This option C looks much worse to the illegal exchange than option B of not noticing anything suspicious in the first place.

If anyone of your customers turns up to be a drug-baron the first thought for a possible defense is to deny any knowledge of anything. You do not want to do things that decline yourself the option of using this kind of defense. And if you know you have drug-barons as customers and you are unable to contact authorities you want the drug-baron go away, shutdown their account and withdraw all money and be gone. That is the way of least consequences to the business.

Ok, let's answer your points then.

Bitstamp is likely operating without appropriate licenses. Bistamp is likely trying their best not to come to the attention of authorities in any way, shape or form because it they ever do, they will probably be shut down at the spot for operating without license. - hah. You know what they same about assuming? I would be surprised if they're not licensed, you can't process millions of dollars through your bank account and hope noone notices. Always good to provide some kind of evidence before saying stuff like that.

They cannot even try to be AML/KYC compliant without contacting the authorities. Yes they can. Just because you're not registered as a high value dealer/money transmitter (some countries don't require it for BTC), doesn't mean you can't still be compliant. And again, who says they're not registered?

Ok, then you make the same point over and over again, which I'll skip.

The checking or origin of funds is supposed to take place during DEPOSITING of the funds. Not at withdrawing. When I have deposited cash slightly above 10kEUR into banks they have asked me about the source of the funds. That is okay. That is also the moment when the banks can easily decline the deposit for any reason whatsoever. I have numerous times withdrawn money from banks in the range of 100k-200kEUR and never been asked about anything. I do not think banks are allowed to confiscate any money without having the authorities intimately involved in the process and when authorities are involved in an inquiry about a customer the banks are not allowed to tip the customer about this ongoing inquiry by authorities in any manner including declining the withdrawal.

No, it's supposed to happen at both sides. Were you withdrawing cash from said banks, or just doing a transfer? Because I've also done plenty of withdrawals in my time, and anything above £5k I have to show ID and they have to fill out an AML form. If they didn't ask you for ID, and it was a cash withdrawal of that size, then not only is your bank terrible, they're also in direct violation of multiple laws.

Banks are allowed to freeze/hold money if they have reason to believe the person is acting fraudulently or criminally. AFAIK, no authorities need to be involved initially, providing money laundering is a factor.

Your tipping off point is wrong. while they can't tip off that you're under investigation, they can decline the withdrawal. If you're cagey about giving ID, they should be filing a suspicious activity report, at which point in the UK they wait for clearance from SOCA/NCA. I don't know what the procedure is in Slovenia, but I'd imagine it's very similar, being in the EU. Tipping off means you can't say the reason for a transaction being delayed was obtaining SOCA clearance, not that you have to proceed totally as normal.


Anyways, the rest of your post (and most of your post in general) seems to rely on the fact that Bitstamp is not properly licensed, which you really could have provided some evidence for. I'll skip the rest and move onto the last paragraph.

If anyone of your customers turns up to be a drug-baron the first thought for a possible defense is to deny any knowledge of anything. You do not want to do things that decline yourself the option of using this kind of defense. And if you know you have drug-barons as customers and you are unable to contact authorities you want the drug-baron go away, shutdown their account and withdraw all money and be gone. That is the way of least consequences to the business.
Heh, yeah, until you end up like Charlie Schrem and end up in court for aiding and abetting money launderers and drug dealers. Note that non-compliance of money laundering rules is a civil matter. What you're suggesting is highly criminal.

[orlinm]

I got the same problem. People who say this is OK are delusional and have no experience with large bank transfers. I totally agree with ab8989. When I receive large deposits in my bank account my bank usually asks me to fill a form to explain the source of the money. But that is the ONLY question they ask. I can fill in anything and they don't ask for any receipts or documents. If the bank suspects something they inform the proper authorities and then it is the authorities' job to investigate and ask questions. That is the normal practice all over the world. Bitstamp already has my ID card, an utility bill and all my banking information. It is enough even to steal my identity. There is no need for them to ask such idiotic questions. Now their support cannot handle all these tickets which were created by them. This is pathetic.

[trdiablo]

It is not OK and they are making me really angry. They are keeping my money hostage at Bistamp without any explanation.
What kind of BS is this.

Even MtGox never stopped SEPA withdrawals! They are still paying SEPA withdrawals, what is the problem of Bitstamp!

[DynamicDK]

I got the same problem. People who say this is OK are delusional and have no experience with large bank transfers. I totally agree with ab8989. When I receive large deposits in my bank account my bank usually asks me to fill a form to explain the source of the money. But that is the ONLY question they ask. I can fill in anything and they don't ask for any receipts or documents. If the bank suspects something they inform the proper authorities and then it is the authorities' job to investigate and ask questions. That is the normal practice all over the world. Bitstamp already has my ID card, an utility bill and all my banking information. It is enough even to steal my identity. There is no need for them to ask such idiotic questions. Now their support cannot handle all these tickets which were created by them. This is pathetic.

At my previous company, I sometimes would be required to send multiple wires in a day, often totaling $100,000-$200,000, to many different individuals and businesses.  When we first started doing this, I was required to fill out lots of paperwork, and even after that, I would randomly be asked to provide more information.  This was banking at one of the largest banks in the US.

What Bitstamp is doing may be a bit more than what an established bank would do, but they are trying to err on the side of caution.  Quit complaining.  Would you prefer they have their funds frozen and stolen, like Mt. Gox?