Crypto Exchange and Anti Money Laundering Question

[Jpop1988]

Hi Community,

Due to a friends' referral, I was trading Bitcoin contracts with leverage at a foreign exchange. The exchange felt legitimate at the time because it requires KYC, and I had to provide my driver license and bank information.

When I first tried to withdraw money, I was able to withdraw $200 twice successfully. However, when I try to withdraw $5000 or $10,000, the exchange rejected my requests. After contacting their customer support, I was told that they flagged my account as suspicious money laundering activity because I was withdrawing large sum of money too frequently. They also said that they submitted my info to a US agency to validate my identity in order to verify that I am not involved in money laundering.

This is where I started to become suspicious about the exchange. Can anyone with related experience please help me to verify the authenticity of what this exchange has told me.

One thing that is reassuring is that I can see the address that the exchange used to send me the $200 is still actively sending money out to other addresses as shown (https://omniexplorer.info/address/15TQfsj6frgTZPyvL8AuqsmXhhvXGq6rZn). I am assuming that these are real withdraw transactions.


Thanks,

Jason

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[LeGaulois]

I find it a bit abusing to call it withdrawing a large sum too frequently, you did it twice only and for a low amount ($200). They can do it for the sake of the AML/CFT regulatory compliance and the customer identification program but it seems strict here.
What is the platform you're talking about?

[Jpop1988]

Hi, thank you for the reply. It's a small foreign exchange that most people wouldn't know about.

Do you happen to know how the AML verification process goes? I am trying to see if I can proactively contact the corresponding US agency to help speed up my case.

I find it a bit abusing to call it withdrawing a large sum too frequently, you did it twice only and for a low amount ($200). They can do it for the sake of the AML/CFT regulatory compliance and the customer identification program but it seems strict here.
What is the platform you're talking about?

[seoincorporation]

It would be nice to know the name of the exchange, that way we could help you better.

First of all, when you use a new exchange verify it's listed under:

https://coinmarketcap.com/rankings/exchanges/

That's a nice reference, and if the business is a scam, the site will tag it. And another nice reference that site gives to us is the capital of the exchange, i would not recommend to use an exchange who was a low capita.

The second step is to google the name of the exchange followed with the word 'Scam', that way you will find if it has any scam accusation.

Think it two times before giving all your info online, it could be used to open accounts in real exchanges, and there you will be involved in a real case of money laundering.

[Jpop1988]

Sure. Here is the site (https://www.icejy.com/#/). I cannot find any information that either verify its authenticity or flag it as scam.

It would be nice to know the name of the exchange, that way we could help you better.

First of all, when you use a new exchange verify it's listed under:

https://coinmarketcap.com/rankings/exchanges/

That's a nice reference, and if the business is a scam, the site will tag it. And another nice reference that site gives to us is the capital of the exchange, i would not recommend to use an exchange who was a low capita.

The second step is to google the name of the exchange followed with the word 'Scam', that way you will find if it has any scam accusation.

Think it two times before giving all your info online, it could be used to open accounts in real exchanges, and there you will be involved in a real case of money laundering.

[hugeblack]

Are you sure that you trusted an unknown site with sums of money? It enables you to withdraw 200 dollars until you feel safe and deposit larger sums.
The date the site was created is recent^[1], there is no Https and there is a lot of scams as follows:

 - From this page^[2], they are talking about the platform being registered in Seychelles. There are no crypto regulation rules in Seychelles, so how did they get an exchange license?
 - the AML laws in Seychelles allow the circulation of $ 10,000, so it is a mistake to consider this transaction against the law^[3].
 - Why were your files sent to a US agency to investigate?

Sorry for losing your money, but it seems that you have lost your personal files as they can be sold on the black market.

[1]

Expires On2021-03-24
Registered On2020-03-24
Updated On2020-03-24

[2]

ICE是一家全球领先的加密货币交易所，并获得由塞舌尔Republic of Seychelles（Seychelles）颁发的数字加密货币交易牌照。总部位于塞舌尔，并在亚太、欧美、中东等多地设有办事处。在全球拥有专业的金融人才和专业的IT人才。

[3] https://www.applebyglobal.com/wp-content/uploads/2019/05/Appleby-FinTech-Guide-Seychelles-Final.pdf

[Yogee]

You may have the honest intention of testing the exchange for depositing and withdrawing small amounts but I would be suspicious too if I see a user suddenly tries an amount that's 25x or 50x higher than the previous. What you could have done is to contact them immediately after your first try at $5,000 but that's all in the past and there's nothing you can do about it.

As much as I would like to check the exchange's terms, I couldn't find an option for English translation. One thing that doesn't make sense is why do they have to send your personal information to a US agency when the exchange appears to be registered in Japan or China.  


I'll go a bit off-topic.
Being listed on Coinmarketcap (CMC) does not necessarily make an exchange legitimate. An exchange called Yobit, who has been selling tokens they made out of thin air, is listed there and have yet to be tagged by CMC as scam. It's just one of the many examples of shady exchanges they listed.

[stompix]

So, brand new website as hugeblack pointed out, the contact address is @yeah.net which I understand is a free service, no phone, no address although they have tens of offices around the world. Yeah, legit!!!

The exchange felt legitimate at the time because it requires KYC, and I had to provide my driver license and bank information.

So because they ask for your info they are legitimate? If I ask you for you driver license would that make me trustable?

However, when I try to withdraw $5000 or $10,000, the exchange rejected my requests. After contacting their customer support, I was told that they flagged my account as suspicious money laundering activity because I was withdrawing large sum of money too frequently. They also said that they submitted my info to a US agency to validate my identity in order to verify that I am not involved in money laundering.

So right now, it all points to a possible scam. Let's say it was not a bait move and that they indeed found something suspicious, no real exchange will tell you they are investigating your account with an US agency, nor will an exchange that is based in Seychelles submit this info the Fincen and then inform you they did it.

Due to a friends' referral, I was trading Bitcoin contracts with leverage at a foreign exchange

It is possible that you met this friend of yours on some social platform? Just asking!

[Jpop1988]

You guys are totally right that I shouldn't have trusted an unknown site.

I trusted in the first place because it :

• use https://
• when I am inspecting how it makes network requests in the chrome console, it's all encrypted

That being said, I agree there are many sketchy aspects about this site.

Most likely I got scammed.

[Yogee]

You guys are totally right that I shouldn't have trusted an unknown site.

I trusted in the first place because it :

• use https://
• when I am inspecting how it makes network requests in the chrome console, it's all encrypted

That being said, I agree there are many sketchy aspects about this site.

Most likely I got scammed.

Sorry for your loss. "https" just means it is safer to browse that site but nobody should use it to determine if a particular service offered is legitimate or not. It's one thing to browse but putting personal information and money is another. Even phishing sites has security protocols too.

[Jpop1988]

Yeah, thank you for your comforting words.

Do you guys know if I can write off these money as capital loss for 2020?

You guys are totally right that I shouldn't have trusted an unknown site.

I trusted in the first place because it :

• use https://
• when I am inspecting how it makes network requests in the chrome console, it's all encrypted

That being said, I agree there are many sketchy aspects about this site.

Most likely I got scammed.

Sorry for your loss. "https" just means it is safer to browse that site but nobody should use it to determine if a particular service offered is legitimate or not. It's one thing to browse but putting personal information and money is another. Even phishing sites has security protocols too.

[coolcoinz]

Yeah, thank you for your comforting words.

Do you guys know if I can write off these money as capital loss for 2020?

Better consult a tax advisor, but most likely yes.

Courts have long held that losses suffered as a result of theft, fraud or embezzlement are generally deductible in accordance with the general limitation contained in paragraph 18(1)(a) of the Income Tax Act, namely that deductions are available to the extent they are incurred to earn income from a business. Much of CRA policy and case law concerning this topic focuses on the connection between the theft or embezzlement and the operations of the business. CRA’s Income Tax Folio S3-F9-C1, Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime, contains CRA’s published position on the tax treatment of losses of trading assets, such as inventory or cash, that occur as a result of theft or embezzlement
https://taxpage.com/articles-and-tips/tax-losses/

Don't forget to report theft to the police, to have a proof.

[Findingnemo]

You shouldn't have to trusted a newly launched domain for such huge money, its a huge loss and not sure why you did trade there when we have lot of other reputed exchange platforms were available. Taking legal actions have very less chance of recovery but at least you can try to track the website owner if your country have strict legal actions again these kinds of crimes.

[carlfebz2]

You shouldn't have to trusted a newly launched domain for such huge money, its a huge loss and not sure why you did trade there when we have lot of other reputed exchange platforms were available. Taking legal actions have very less chance of recovery but at least you can try to track the website owner if your country have strict legal actions again these kinds of crimes.

Its always been a question on why there are people who lost up their track and i dont know where they do able to meet up these exchangers or new services out there

on where they can actually make up a simple search and would able to get rid of those things and try to deal with the famous ones which is more worth to be done.

@OP, its good that you do already accept your situation that those money are already lost because withdrawing $5k and 10k simultaneously wont really require that verification stuff.

Come to think that Binance do even had that 2BTC limit for unverified accounts.

[Yaunfitda]

Hi Community,

Due to a friends' referral, I was trading Bitcoin contracts with leverage at a foreign exchange. The exchange felt legitimate at the time because it requires KYC, and I had to provide my driver license and bank information.

First, exchanges asking for KYC doesn't mean that they can be fully trusted, specially with your personal information. Second, most crypto enthusiast will stay away from exchanges that enforces KYC.

I'm really sorry for you loss, it looks like this exchange gives you the sense of security in the beginning (which is one of the well known trick by a scammers) and you really fall for that trap. On the bright side, take his as a lessons learn on your end because there's no way that you can get that money back, sorry to burst the bubble for you.

[usekevin]

Investing of Money in Crypto is the best option to keep away from the eyes of others. You only know the password of your wallet, avoid of sharing your wallet pass to anyone feels not safe and to the strangers. It's possible to transfer the bitcoin from your wallet to them. After transfer ,you don't know who had made it .

[comptant]

Scam is when a super market sells you outdated products by changing stickers.

Its not a scam, its called fraud