Exchanges in decentralized wallets are unreliable

[zasad@]

https://twitter.com/_0xSea_/status/1604648798223208449
The user decided to change #USDT worth $2,932,345 to #USDC on the Changelly service.

Read the story and see how it ends. She hasn't finished yet.
If you need to change tokens, then use decentralized services and do not send large amounts at a time.I used Changelly but my maximum amount was no more than $1,000.

[1714676175]

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[1714676175]

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[Yogee]

Have to use google translate to get an idea of what's going on but I'm not sure about the accuracy. So the user allegedly had his funds withheld from using Changelly. The exchange has asked KYC and source of funds as part of their compliance with AML policies.

It's hard to believe that a user who would transact millions of dollars would blindly use a platform they haven't even heard of or never tried before. Of course that would be flagged even if the exchange is non-custodial.

[zasad@]

Have to use google translate to get an idea of what's going on but I'm not sure about the accuracy. So the user allegedly had his funds withheld from using Changelly. The exchange has asked KYC and source of funds as part of their compliance with AML policies.

It's hard to believe that a user who would transact millions of dollars would blindly use a platform they haven't even heard of or never tried before. Of course that would be flagged even if the exchange is non-custodial.

I will explain in more detail as I use a ledger wallet myself.
In Ledger Live, you can change one coin for another, but there are not many coins there, like on a centralized exchange. The exchange takes place in the Ledger Live interface, which is secure, but the exchange is done through centralized services.

You can also connect via metamask to Uniswap or 1inch, but these are the risks of losing funds through vulnerabilities in smart contracts. Therefore, I use the first wallet on Ledger Live to exchange coins, and the subsequent ones only for storage.

If you do not know how exchanges work, then it is better not to use them, or send the minimum amount at a time, like I did for $ 1,000. It may take a long time, but it will take even longer to return your money for months later. You will have to answer dozens of different questions about your financial transactions and where you get your money from.

[BIT-BENDER]

I don’t know where she got it wrong because I have not used that exchange site, although I am the type of person that won’t take a chance with my funds and transfer deal on big amounts regardless of if I understand the exchange or not.

Decentralized exchange is definitely preferable that centralized exchange but it shouldn’t call for complacency from the user, I don’t know if there is any where she can file a complaint on changely is that possible?

[zasad@]

I don’t know where she got it wrong because I have not used that exchange site, although I am the type of person that won’t take a chance with my funds and transfer deal on big amounts regardless of if I understand the exchange or not.

Decentralized exchange is definitely preferable that centralized exchange but it shouldn’t call for complacency from the user, I don’t know if there is any where she can file a complaint on changely is that possible?

Ledger is a decentralized wallet, and most users think that the exchanges in the interface of this wallet are also decentralized. This is a user error. There is even a warning that the exchange will be through a partner, but apparently people do not read this. And after sending money, you agree to the Terms of Use.
https://changelly.com/terms-of-use

[JeromeTash]

The only type of wallet I would consider decentralized and noncustodial at the same time is a full node wallet like Bitcoin core. Ledger is a noncustodial hardware wallet, but I don't think it has anything to do with decentralization. Someone correct me if I am wrong.

People are so dumb to notice that internal exchanges in such wallets involve third parties that are usually centralized and what is hurting is that most of those noncustodial wallets use services like changelly, changerhero, paxful... all those services have a bad track record of holding customer's funds and requesting for KYC.

[goaldigger]

The only type of wallet I would consider decentralized and noncustodial at the same time is a full node wallet like Bitcoin core. Ledger is a noncustodial hardware wallet, but I don't think it has anything to do with decentralization. Someone correct me if I am wrong.

People are so dumb to notice that internal exchanges in such wallets involve third parties that are usually centralized and what is hurting is that most of those noncustodial wallets use services like changelly, changerhero, paxful... all those services have a bad track record of holding customer's funds and requesting for KYC.

Ledger is a decentralized wallet, but if you do used their swap options then probably they are going to used third party exchanges which are a centralized exchange but I don’t think KYC will be asked. Though I haven’t try their swap option because I think the fees will be more expensive compare to the normal trade. If you are not ok with the KYC then try to use DEX more often, used ledger or any hard wallet only for storing crypto and not for your swap option.

[Yaunfitda]

https://twitter.com/_0xSea_/status/1604648798223208449
The user decided to change #USDT worth $2,932,345 to #USDC on the Changelly service.

Read the story and see how it ends. She hasn't finished yet.
If you need to change tokens, then use decentralized services and do not send large amounts at a time.I used Changelly but my maximum amount was no more than $1,000.

Haven't read the story yet, but as per my experienced, yeah I don't do one big amount, I just try to test small amounts only because there could be problems that could arise with that huge amount and who knows, maybe the 3rd party will hold off your crypto (and I"m assuming that this might be the case on that user).

I also used changelly before, but If I'm not mistaken, there are a lot of complains as well before, that's why I stop using their services. Plus I have found ways to easily change my crypto to my local fiat actually. Anyhow, this is another lessons to be learned again in this market. Having that huge amount will definitely attract attention.

[electronicash]

so he is saying its the ledger that has the problem?

changely is popular but i think most people who goes there use debit/credit cards to buy crypto not swapping. this is getting many people confused already whether which is safe to go. custodial and hardware wallet will still have problems like this one. another fud for users who got out of exchanges to return. 

[tabas]

That's a huge amount to entrust and trade there. So, if I understand it correctly, the user has used the swap feature that he's got with the Ledger live presumably. I can't read the whole thing but I'm just basing on the few pictures and the translate tweet but not the rest.

so he is saying its the ledger that has the problem?

Likely because he did the swap there on Ledger's platform (Live) which is an integrated and partnered service with Changelly.

[zasad@]

The only type of wallet I would consider decentralized and noncustodial at the same time is a full node wallet like Bitcoin core. Ledger is a noncustodial hardware wallet, but I don't think it has anything to do with decentralization. Someone correct me if I am wrong.

People are so dumb to notice that internal exchanges in such wallets involve third parties that are usually centralized and what is hurting is that most of those noncustodial wallets use services like changelly, changerhero, paxful... all those services have a bad track record of holding customer's funds and requesting for KYC.

The ledger has the ability to make a full node for bitcoin, but it takes a long time. For fast payments, it's usually more convenient to use the Electrum Wallet interface if you don't like Ledger Live. And for Ethereum and its forks, a full node is not needed, and the ledger is compatible with many well-known wallets.

[hd49728]

The user decided to change #USDT worth $2,932,345 to #USDC on the Changelly service.

Read the story and see how it ends. She hasn't finished yet.

Changelly also has accusation on Bitcointalk too.

CHANGELLY / SIMPLEX IS A SCAM !!!
Changelly - FAKE KYC/AML
CHANGELLY - Illegal exchanger from RUSSIA with FAKE team
ChangeNow.io (Evercode Lab) - Scam. Illegally holding of 100 BCH (11 bitcoins).

Likely they did not close those accusations.

[zasad@]

The user decided to change #USDT worth $2,932,345 to #USDC on the Changelly service.

Read the story and see how it ends. She hasn't finished yet.

Changelly also has accusation on Bitcointalk too.

CHANGELLY / SIMPLEX IS A SCAM !!!
Changelly - FAKE KYC/AML
CHANGELLY - Illegal exchanger from RUSSIA with FAKE team
ChangeNow.io (Evercode Lab) - Scam. Illegally holding of 100 BCH (11 bitcoins).

Likely they did not close those accusations.

This is a very dangerous time and regulators will require AML and KYC for all major transactions, especially stablecoins. I think that soon the owners of stablecoins will be forced to undergo these procedures. Many exchanges block user funds, so I recommend everyone to change in small amounts or not to use centralized services.

[jrrsparkles]

https://twitter.com/_0xSea_/status/1604648798223208449
The user decided to change #USDT worth $2,932,345 to #USDC on the Changelly service.

Read the story and see how it ends. She hasn't finished yet.
If you need to change tokens, then use decentralized services and do not send large amounts at a time.I used Changelly but my maximum amount was no more than $1,000.

Changelly isn't reliable service though, they have lot of unsolved accusations even in this forum so which service we are using for conversion is really important.

Well, what you're trying to say it correct too, decentralized exchanges are not user friendly so if we stuck with a problem then we may end up with no solution on certain situations that should be addressed by the crypto community and need to build more DEXs which are user friendly then only it is possible to attract volume like centralized exchanges.

[hd49728]

This is a very dangerous time and regulators will require AML and KYC for all major transactions, especially stablecoins. I think that soon the owners of stablecoins will be forced to undergo these procedures. Many exchanges block user funds, so I recommend everyone to change in small amounts or not to use centralized services.

This is dangerous when fiasco effects are there and legislations are not clear but they will come.

I actually think that crypto market will grow more when this industry is governed by more and better legislations. It is a normal procedure towards a safer and bigger industry for investors.

Stable coins will be most priorities under radars of governments because they are more easily to be found and they are more popular, public than altcoins. Stable coins have longer longevity than altcoins too.

[albon]

https://twitter.com/_0xSea_/status/1604648798223208449
The user decided to change #USDT worth $2,932,345 to #USDC on the Changelly service.

Read the story and see how it ends. She hasn't finished yet.
If you need to change tokens, then use decentralized services and do not send large amounts at a time.I used Changelly but my maximum amount was no more than $1,000.

The fatal mistake lies with this user who trusted the Changelly services at first sight and deposited this huge amount at once without even dividing it into payments and at different intervals. Also, how can a person who owns nearly 3 million dollars not read the policies and terms of service of the exchange platform through which he will exchange his wealth, this indicates his foolishness without a doubt. I do not blame Changelly because these are their policies that everyone who will use their services must read and agree to them carefully, and these measures that they take care to prevent suspicious money resulting from money laundering, terrorist financing, and others, and this is what makes the platform legal and far from criminal charges, for me, I haven't tried Changelly before and I can't trust the exchanges that the accusations are made against, I can only try a small amount.

[dothebeats]

That's a painful mistake, and an extremely expensive one at that. The last time I used changelly was in 2021 trying to convert coins just to get the general feel of it. The service is neat and all but again, you still have to read and understand what's going on before making a conversion or doing anything. The fact that they have $3m to begin with and do not understand that there might be troubles along the way tells me that they just got lucky, and that they don't know much about crypto, exchanges, and how these works in general. Awfully expensive mistake, but it's on them not being careful and blindly sending in millions on an exchange that is supposed to only be used in small amounts.

[samcrypto]

Can’t read the whole tweet but losing that kind of money is really painful especially because of your own mistake. Wondering why there’s a need to change USDT to USDC in just one transaction, that’s too risky for me. Reading the terms and conditions at first is also ideal, if you have that money better to be more careful next time and read everything before you make a transaction, or else you problem like this might happen.

[Jawhead999]

There's no such secure if you're still using centralized exchange even though you're using non custodial wallet, also connecting wallet to swap platform has a risk too. The best is you need to use the real 100% decentralized exchange e.g. Bisq, there's no chance it will compromise your wallet since Bisq is a standalone exchange too where you need to download it yourself and similar like run Bitcoin in full node where you have full control over your funds.

[vv181]

so he is saying its the ledger that has the problem?

Likely because he did the swap there on Ledger's platform (Live) which is an integrated and partnered service with Changelly.

It's not fully Ledger's fault.


A TLDR; about the tweets.

Someone wants to exchange USDT into USDC via the Ledger wallet's in-app exchange feature. The default recommended platform is Changelly, as it stated the process will be quick and no registration is needed. Unfortunately, Changelly held the transaction process, and ask KYC and the source of funds. He complied will all the required information, but Changelly does not give any further information about the funds.

So, in short, As also noted above, Changelly sucks. Everyone should not use the platform.