Exchange BTC addresses

[Surmount]

Hi,

I'm having a tough time understanding this problem.

Awhile ago I deposited some money into an exchange, bought some BTC and immediately deposited it into a forex account.

Now when I try to withdraw the forex broker tells me that my wallet address I have with the exchange is not the same one that originally sent the BTC. This can't be true since I have the transaction history on the exchange and know that I sent it from there right after buying.

What is going on?

The BTC exchange I am using is Shakepay.

[DannyHamilton]

I don't know anything about ShakePay, but MOST exchanges pool the bitcoin funds together.

When you ask the exchange to send out some bitcoins on your behalf, they generally will be sent from a pool of bitcoins that the exchange has control over, and won't necessarily be the same bitcoins that they received when you deposited them.

Banks work the same way with cash.  When you deposit cash into a bank, that cash gets mixed together with all the other cash that the bank is holding.  Then when you withdraw your cash, you don't typically get the EXACT SAME bills that you deposited.

Why does the ForEx broker care if the address is the same?  He should just send the funds wherever you ask him to.

[bitmover]

Now when I try to withdraw the forex broker tells me that my wallet address I have with the exchange is not the same one that originally sent the BTC. This can't be true since I have the transaction history on the exchange and know that I sent it from there right after buying.

What is going on?

The BTC exchange I am using is Shakepay.

What they are saying might be true. You may have sent funds from one address and trying to wothdrawal to another. This is not a problem and should be able to withdrawal anyway.

Do you have the transaction history in the blockchain? It is a long hash code, like this:

https://mempool.space/pt/tx/2c1b7fda12e227b4c6d98e61750c06497807de7b3b461ad24af56b0421125fe6

You can search for the address history in any block explorer. Look for the address you sent your coins in the forex exchange

Why does the ForEx broker care if the address is the same?  He should just send the funds wherever you ask him to.

DannyHamilton is right. You can withdrawal  to any address you want. Is it just a warning waiting for your confirmation  or  are they refusing to withdrawal?

[Surmount]

Why does the ForEx broker care if the address is the same?  He should just send the funds wherever you ask him to.

DannyHamilton is right. You can withdrawal  to any address you want. Is it just a warning waiting for your confirmation  or  are they refusing to withdrawal?

Forex has very strict AML policies. Cash can only be withdrawn to the same source that made the deposit. They've specifically told me that they can only withdraw to the same BTC address that made the deposit.

Looking at the transaction history of my broker BTC address I can see my deposits being made. Searching for the address I have with the exchange shows that no transactions have been made on that address.

What is strange is that the address the forex broker tells me is the one that made the deposit has only made 2 transactions while I've personally made several.

At first I'd assume that it is because the exchange uses a pool as Danny has said but if it was a pool wouldn't there be more than 2 transactions on that account?

If I'm allowed, I can share the relevant BTC addresses.

Also, there doesn't seem to be any issue withdrawing from a separate account back to Coinbase.

EDIT. Found the address. Apparently Shakepay sometimes changes the address, maybe after every transaction.

[bitmover]

Why does the ForEx broker care if the address is the same?  He should just send the funds wherever you ask him to.

DannyHamilton is right. You can withdrawal  to any address you want. Is it just a warning waiting for your confirmation  or  are they refusing to withdrawal?

Forex has very strict AML policies. Cash can only be withdrawn to the same source that made the deposit. They've specifically told me that they can only withdraw to the same BTC address that made the deposit.

Looking at the transaction history of my broker BTC address I can see my deposits being made. Searching for the address I have with the exchange shows that no transactions have been made on that address.

What is strange is that the address the forex broker tells me is the one that made the deposit has only made 2 transactions while I've personally made several.

At first I'd assume that it is because the exchange uses a pool as Danny has said but if it was a pool wouldn't there be more than 2 transactions on that account?

The safest way to discover which address they are talking about is to go to your forex broker account and look at your deposit address , or your deposit history (there might be something like that there).

Once you find those addresses, you can see the transactions in the blockchain and you will be able to see from which addresses you sent your coins from.

If those addresses are not addresses linked to your account in your ShakePay account, then you can contact them. They are the only ones who have the private keys of those addresses. Alternatively, you can talk to the forex exchange and try to withdrawal to other addresses, or withdrawal in cash.

If I'm allowed, I can share the relevant BTC addresses.

Also, there doesn't seem to be any issue withdrawing from a separate account back to Coinbase.

EDIT. Found the address. Apparently Shakepay sometimes changes the address, maybe after every transaction.

You are allowed, however everyone will be able to see how much bitcoins you sent when you share it here.


I went to https://shakepay.com/ website  to take a look at the exchange. On the top of the page they are saying Bitcoin is worth 52k USD and ETH 3212... Their API looks to be broken.. doesn't look like the best exchange around. I would try to solve the problem with the forex first.

[Surmount]

I went to https://shakepay.com/ website  to take a look at the exchange. On the top of the page they are saying Bitcoin is worth 52k USD and ETH 3212... Their API looks to be broken.. doesn't look like the best exchange around. I would try to solve the problem with the forex first.

Shakepay is a Canadian exchange so the prices you are seeing are in Canadian dollars. Can't say much about their API but the website looks like it was made from the same template as YouHodler.

I did find out that I had made a successful withdrawal in mid June to the same address that the forex broker wants me to use.

My guess is that Shakepay changes the address after every transaction like Coinbase claims they do.

Definitely something to keep in mind for the future. Waiting for Shakepay to respond and give me a list of all addresses tied to my account as well as confirm that they do change the address.

[nc50lc]

EDIT. Found the address. Apparently Shakepay sometimes changes the address, maybe after every transaction.

You must be talking about your Shakepay deposit bitcoin address.
They do change deposit address but if it work just like any exchange, the address used for withdrawal isn't tied with your account.
It could be one of their "hot wallet" address that's specifically used for users' withdrawals (can't be 100% sure without the address).

Forex has very strict AML policies. Cash can only be withdrawn to the same source that made the deposit. They've specifically told me that they can only withdraw to the same BTC address that made the deposit.

If it's AML policy, try to explain to them that you've bought bitcoins through Shakepay (a custodial service) and sent the bitcoins to them.
Sending them your transaction history and the specific transaction's details might help. (Link: help.shakepay.com - Where can I see my full transaction history on Shakepay?)
You can also send this thread's link as a reference.

There should be a qualified technical support that can understand that Exchange withdrawals doesn't work like a non-custodial bitcoin wallet.

[Surmount]

EDIT. Found the address. Apparently Shakepay sometimes changes the address, maybe after every transaction.

You must be talking about your Shakepay deposit bitcoin address.
They do change deposit address but if it work just like any exchange, the address used for withdrawal isn't tied with your account.
It could be one of their "hot wallet" address that's specifically used for users' withdrawals (can't be 100% sure without the address).

Forex has very strict AML policies. Cash can only be withdrawn to the same source that made the deposit. They've specifically told me that they can only withdraw to the same BTC address that made the deposit.

If it's AML policy, try to explain to them that you've bought bitcoins through Shakepay (a custodial service) and sent the bitcoins to them.
Sending them your transaction history might help. (Link: help.shakepay.com - Where can I see my full transaction history on Shakepay?)
You can also send this thread's link as a reference.

There should be a qualified technical support that can understand that Exchange withdrawals doesn't work like a non-custodial bitcoin wallet.

You mean an address previously used for my account may eventually be used for someone else?

After digging I found that on June 25 I had made a successful withdrawal from the forex broker to a BTC address. On Shakepay I see I received BTC on June 25th and cashed it out. The amount I withdrew and cashed out is nearly identical. Blockstream also shows that it was sent to the address that the forex broker wants me to use.

Coinbase say they change the address but the old ones remain tied to the account.  Must be the same for Shakepay.

For now I've withdrawn a small amount from the forex broker to the specified address. Will wait and see if it ends up in my Shakepay account.

UPDATE: I just received the small amount from the forex broker. I guess the old address is still valid and tied to my account. Quite a nerve wracking experience though, I had a lot of money in that forex account and brokers are notoriously strict about AML policy partly because they don't want people to withdraw.

[nc50lc]

UPDATE: I just received the small amount from the forex broker. I guess the old address is still valid and tied to my account. Quite a nerve wracking experience though, I had a lot of money in that forex account and brokers are notoriously strict about AML policy partly because they don't want people to withdraw.

So I guess that exchange is an exception from the usual, looks like they assign addresses and manage funds like a non-custodial wallet, except they are in control of the keys.

-snip-

You mean an address previously used for my account may eventually be used for someone else?

No, I was talking about most Exchange's usual withdrawal procedure, as explained by Danny.
They consolidate all the users deposits to a hot wallet and use some of it for withdrawal, so the address used for withdrawal is in their control, not the user.

[o_e_l_e_o]

So I guess that exchange is an exception from the usual, looks like they assign addresses and manage funds like a non-custodial wallet, except they are in control of the keys.

It certainly seems that way from what OP is saying, but that is not how they work. They work like every other centralized exchange, and batch customers' funds together for storage and withdrawals. See their post here - https://blog.shakepay.com/bitcoin-transaction-batching/. And you can also see plenty of posts on their subreddit confirming that withdrawals are indeed batched.

It sounds like Shakepay generates a new address for each deposit, and the Forex broker is sending coins to an old deposit address which is still valid for OP's account, even if he can't see it on his Shakepay account. I'm not sure about the whole "must send to the same address which deposited" thing though, which does not make sense given we know that Shakepay batch their withdrawals.

[khaled0111]

Forex has very strict AML policies. Cash can only be withdrawn to the same source that made the deposit. They've specifically told me that they can only withdraw to the same BTC address that made the deposit.

Then someone must explain to them that bitcoin is not the same as cash and bitcoin wallets aren't bank accounts! Most if not all wallet apps and exchanges create new addresses for each transaction and a wallet can have an unlimited number of addresses. They shouldn't care which address you use to deposit/withdraw as long as they know it's you who issued the transaction and you are withdrawing to your own wallet. What would happen if you lose access to your wallet!

You were lucky that your old address was still active and tied to your account. Some other exchanges/services work differently, if you make a deposit to an old wallet, the sent money will be lost.

[Surmount]

You were lucky that your old address was still active and tied to your account. Some other exchanges/services work differently, if you make a deposit to an old wallet, the sent money will be lost.

When I talked to the forex broker about this they insisted money be withdrawn to the wallet used to make the initial deposit. I can't have been the only one who experienced this so they must have some sort of policy in place for extreme cases. Either that or they continue to refuse to make the withdrawal forever which benefits them since the money in the broker is effectively theirs.

Coinbase support says that all previously used wallets remain tied to the account and are never removed. I wouldn't be surprised if Shakepay works the same way however their support is pretty bad and I've still yet to receive a reply from them.

In any case, I feel lucky that I got my money out and will stick to wire transfers for now while I wait for banking institutions to adapt to new tech.

[o_e_l_e_o]

In any case, I feel lucky that I got my money out and will stick to wire transfers for now while I wait for banking institutions to adapt to new tech.

For future reference, the way around this is to insert your own wallet in between the bitcoin exchange (Shakepay in this case) and your Forex broker.

If you set up your own wallet in which you own the private keys, such as by using a piece of software like Bitcoin Core or Electrum, or by buying a hardware wallet such as a Trezor or Ledger for added security, then you can guarantee that you will always have access to the same addresses and they will never expire or be unlinked from your account or anything else that an exchange might do. You can withdraw from the exchange to your own wallet, and then from your own wallet deposit to the Forex broker (or whomever else you are sending bitcoin to). If they insist on only sending bitcoin back to the same address it came from, then that does not pose any issue at all, since you are the sole owner of that address and you can use it as many times as you like (although reusing the same address endlessly is bad for your privacy).

[Surmount]

Thanks. That is solid advice.

Though having to pay double the transaction fees will be slightly annoying at least until they add functionality for other types of crypto.

[LoyceV]

Though having to pay double the transaction fees will be slightly annoying at least

Unlike exchanges, using your own wallet means you get to choose the fee you use. For the past month, minimum fees have been very low and $0.05 in fees can be enough.

[Pmalek]

Though having to pay double the transaction fees will be slightly annoying at least until they add functionality for other types of crypto.

Those demands your Forex broker has are even more annoying and as you experienced yourself, they created a lot of headache. Imagine if you weren't able to withdraw funds to the original address and that you never gained control of its balance, but your broker insisted on using only that one no matter what you say? Luckily, you sorted it out.

LoyceV is right. A 1 input and 1-2 outputs segwit transaction is well it considering the problems that centralized exchanges can create.

[DannyHamilton]

looks like they assign addresses and manage funds like a non-custodial wallet, except they are in control of the keys.

That would be HORRIBLE news.  If that's true, I'd IMMEDIATELY stop using Shakepay, and would withdraw ALL my funds of all types (crypto and Fiat).

If they are not pooling the funds, and sending out different coins than they are receiving, then it is impossible for them to maintain any reasonable amount of cold storage! This is a HUGE security risk.  It means that ALL private keys for ALL crypto funds are accessible electronically.  It means that FAR too many employees in that company have access to EVEERYONE's private keys.  That would be a disaster just waiting to happen.

My hope is that what really happened is the following:

Previously Surmount interacted with this ForEx broker and asked them to send some bitcoins to an address at Shakepay.  The broker entered the requested address into their system as being an "account number" for Surmount.  When Surmount now, later, requested a new transaction, it was a different address than the first time, and therefore the ForEx broker refused out of concern that sending to multiple "accounts" could be a sign of money laundering.

If that is what happened, then it's still possible that the funds that the ForEx received were still from some pooled funds, and that the ForEx broker is not looking at the transaction from Shakepay and trying to discern an address that the bitcoins "came from".

In this case, the ForEx broker needs some serious education about Bitcoin.  Addresses are NOT "accounts", and in bitcoin there is no such thing as a "sending address" or an address that the bitcoins in a transaction "came from".  A single "account" at custodial service can have an uncountable number of addresses. I would not trust this ForEx broker with Bitcoins until they can demonstrate that they understand some basic facts about how Bitcoin transactions work.

[suzanne5223]

When I talked to the forex broker about this they insisted money be withdrawn to the wallet used to make the initial deposit. I can't have been the only one who experienced this so they must have some sort of policy in place for extreme cases.

I'm not used to forex brokers or know how they operate but if you read their faq or terms and conditions they would have stated that they can only withdrawaw crypto-related transactions to the deposited address and it is their only way of preventing their customer funds from online theft.
I will advise you always read about every platform's rules and conditions before using it to avoid this kind of issue in the future.

[Surmount]

When I talked to the forex broker about this they insisted money be withdrawn to the wallet used to make the initial deposit. I can't have been the only one who experienced this so they must have some sort of policy in place for extreme cases.

I'm not used to forex brokers or know how they operate but if you read their faq or terms and conditions they would have stated that they can only withdrawaw crypto-related transactions to the deposited address and it is their only way of preventing their customer funds from online theft.
I will advise you always read about every platform's rules and conditions before using it to avoid this kind of issue in the future.

I was aware of their AML policies before I opened an account. What I didn't know is that exchanges will assign new addresses after every transaction.

That would be HORRIBLE news.  If that's true, I'd IMMEDIATELY stop using Shakepay, and would withdraw ALL my funds of all types (crypto and Fiat).

I only use them as an on/off-ramp, I wouldn't recommend anyone hold assets in any exchange.

Assigning new addresses to users after every transaction seems to be standard practice with exchanges now. I've confirmed that Shakepay and Coinbase both do this. I can also confirm that these new accounts are not pooled with anyone else. The address that Shakepay created for me has only one incoming and outgoing transaction that matches the transaction I made.

The exchanges probably hold the keys and monitor all these addresses.

e, the ForEx broker needs some serious education about Bitcoin.  Addresses are NOT "accounts", and in bitcoin there is no such thing as a "sending address" or an address that the bitcoins in a transaction "came from".  A single "account" at custodial service can have an uncountable number of addresses. I would not trust this ForEx broker with Bitcoins until they can demonstrate that they understand some basic facts about how Bitcoin transactions work.

I think I'll side with the FX broker on this one since it would be heaven for money launderers if they could deposit BTC from one address and then withdraw to a completely different one. 

[DannyHamilton]

Assigning new addresses to users after every transaction seems to be standard practice with exchanges now. I've confirmed that Shakepay and Coinbase both do this.

Using a new address for EVERY TRANSACTION is not a problem.  That's actually the best way to use bitcoin. The concern is if those receiving addresses are being treated as account numbers and the funds are not being held in cold storage.

I can also confirm that these new accounts are not pooled with anyone else.

First of all, they are not "accounts". These are "addresses". There's a huge difference.  A bitcoin address is more like an invoice number than an account.  It's a way to track and control a specific payment that you receive.

The address that Shakepay created for me has only one incoming and outgoing transaction that matches the transaction I made.

That's a HUGE problem.  If this is true, I'd avoid using Shakepay until they can demonstrate that they've improved their security practices.

I think I'll side with the FX broker on this one since it would be heaven for money launderers if they could deposit BTC from one address and then withdraw to a completely different one.  

There's no such thing as depositing "from a bitcoin address".  That sentence doesn't make sense.  You deposit TO an address (specifically, the address that the ForEx provider tells you to deposit TO). It's entirely possible AND VERY COMMON for a single transaction to contain bitcoins that were received at multiple different addresses.  Which address would the ForEx broker require you to use in that case?  It's also possible for a transaction output to contain a script that can not be converted to an address at all.  If you sent those bitcoins to the ForEx, how would they handle your withdrawal?  If your broker (or his company) don't understand that there's no such thing as a "sending address" in a transaction, and that bitcoin addresses shouldn't be re-used, then I wouldn't trust them to handle bitcoins properly at all, and would look for a new broker.

Under most circumstances, Bitcoin addresses should NOT be re-used.  Once you receive bitcoins at an address, you should not receive additional bitcoins at that address in the future. You should use a new address each time.  There is no money laundering benefit that is prevented by requiring someone to re-use a previous bitcoin address.