Do you know what is hiding behind Centralized exchanges User Agreement?

[John Abraham]

Hi Guys,

Due to significant factors discussed in this thread. I believe it needs a separate thread to aware the community about "What is hiding behind Centralized Exchanges User Agreement". Literally, I had no idea what was written on their User Agreement page until today. It's almost impossible to read all terms and conditions when we sign up on every website. But, regarding exchanges, casinos or where we will spend our money. It is worth reading before you sign up. I am pretty much sure 95% of users of these exchanges don't know what is written on their user agreement page. Because they are too long articles and we miss the critical part where they reported that they could seize user funds for any reason without any explanation. Would you deal with such platforms when they say they can seize your funds for any reason without giving you an explanation?

Here I gathered up the Top five centralized exchanges^[1] Important part of the User Agreement.

1. Binance;

You agree that Binance shall have the right to immediately suspend your Binance Account (and any accounts beneficially owned by related entities or affiliates), freeze or lock the Digital Assets or funds in all such accounts, and suspend your access to Binance for any reason including if Binance suspects any such accounts to be in violation of these Terms, our Privacy Policy, or any applicable laws and regulations. You agree that Binance shall not be liable to you for any permanent or temporary modification of your Binance Account, or suspension or termination of your access to all or any portion of Binance Services. Binance shall reserve the right to keep and use the transaction data or other information related to such Binance Accounts. The above account controls may also be applied in the following cases:

2. Kraken;

In the event of any Force Majeure Event (as defined in Section 23.5), breach of these Terms, or any other event that would make provision of the Services commercially unreasonable for Payward, we may, in our discretion and without liability to you, with or without prior notice, suspend your access to all or a portion of our Services. We may terminate your access to the Services in our sole discretion, immediately and without prior notice, and delete or deactivate your Kraken Account and all related information and files in such account without liability to you, including, for instance, in the event that you breach any of these Terms. In the event of termination, Payward will attempt to return any Assets stored in your Kraken Account not otherwise owed to Payward, unless Payward believes you have committed fraud, negligence or other misconduct.

3. Coinbase;

6.10. Suspension, Termination, and Cancellation. Coinbase may suspend, restrict, or terminate your access to any or all of the Coinbase Services, and/or deactivate or cancel your Coinbase Account(s), with immediate effect for any reason at its sole discretion and is under no obligation to disclose the details of its decision to take such action with you. You acknowledge that Coinbase's decision to take certain actions, including limiting access to, suspending, or closing your account for any reason in our sole discretion, may be based on confidential criteria that are essential to Coinbase's risk management and security protocols. You agree that Coinbase is under no obligation to disclose the details of its risk management and security procedures to you.

4. KuCoin;

Article 35 Where the Platform deems on its unilateral and independent judgement that any event that undermines the security of trading may arise, the Platform shall have the right to suspend, interrupt or terminate all or part of the User services (including fee-based services) provided to a User under this Agreement, remove or delete registration information of such a User, seize illicit profits that the User may gain, without notifying such User and without assuming any responsibility to such User or any third party. The aforementioned events include other circumstances under which the Platform, based on its sole judgment, needs to suspend, interrupt or terminate all or part of the User services (including fee-based services) provided to Users under this Agreement and remove or delete the registration information on the ground of transaction security and other reasons.

5. BitFinex;

Right to Use the Site: If you (i) have an Account, (ii) are not a Prohibited Person, (iii) do not operate your Account, any subaccount or Digital Tokens Wallet for the benefit of a Prohibited Person and (iv) comply with these Terms of Service, Bitfinex grants you the limited right to use the Services. The right to use the Services is a personal, restricted, non-exclusive, non-transferable, non-sublicensable, revocable, limited license, and it is subject to the limitations and obligations in these Terms of Service. Nothing in these Terms of Service gives you any license (other than as set out in this paragraph), right, title, or ownership of, in, or to the Site, any of the Services, the Copyrights or the Marks. Bitfinex may suspend or terminate the provision of Services to you, your Account or any subaccount or Digital Tokens Wallet, or to any of your Digital Tokens Addresses, or to freeze or terminate your Account or any subaccount or Digital Tokens Wallet, or your Fiat or Digital Tokens, at its sole discretion, as required by applicable Laws, where Bitfinex determines that you have violated, breached, or acted inconsistent with any of these Terms of Service or exposed Bitfinex or its Associates to the possibility of sanctions, restrictions or Losses pursuant to applicable Laws, or in connection with an investigation regarding any of the foregoing.

For more detailed information. I recommend you visit the sources below.
Sources:1. https://coinmarketcap.com/rankings/exchanges/
2. https://www.binance.com/en/terms
3. https://www.kraken.com/legal
4. https://www.coinbase.com/legal/user_agreement/united_states
5. https://www.kucoin.com/news/en-terms-of-use
6. https://www.bitfinex.com/legal/exchange/terms

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[lovesmayfamilis]

I will add another topic that was also created recently. I think in order not to get double answers, it will be useful for you, OP, to read the opinions of the people who answered in this thread.

How many people read crypto exchange terms and condition this day?

[Charles-Tim]

I even do not think there is any source needed about any exchanges because it is clear that they are centralized and far worse to the extent that the exchanges do not give users seed phrase, private key or anything related that can be used for coin recovery, the exchanges have the private key, that only means that any coin sent to your account in those exchanges are not yours on blockchain and you have no full control over your own coins.

Another thing is that some exchanges have been haked in the past and some were not able to refund users their coins.

Exchanges are now requiring for KYC which can also lead to breach and which is often used for phishing attempt.

[Rikafip]

Would you deal with such platforms when they say they can seize your funds for any reason without giving you an explanation?

When you realize the fact that once you send the money on centralized exchange its practically not yours anymore and they can do whatever they want it for whatever reason, you start acting accordingly meaning not using it for storing and only for its initial purpose (read: exchange).

For that reason, I never have more than a couple of hundreds of dollars on an exchange because I know that every time I send it, it may be the last time I saw them.

[John Abraham]

I will add another topic that was also created recently. I think in order not to get double answers, it will be useful for you, OP, to read the opinions of the people who answered in this thread. How many people read crypto exchange terms and condition this day?

I just checked the thread and read some interesting replies. Some people agreed they did not read the User Agreement, just like me.
I created this thread for everyone who did not read the User Agreement when they signed up. It's impossible to read a few thousand words written for global users. Some part was written for some specific users. That's why users think I am not from there, so reading this has no benefit. In this thread, I quoted the most crucial part of the User Agreement, where Exchanges said they have the right to freeze your account at any time without explaining.

I wish people at least read this part of the user agreement, so they know that their funds are at risk. Everyone thinks it won't happen to me until it happens to them. About double answers, I don't mind when people keep answering the same thing even though the same answers have already been posted by someone else (This is a perfect example). The issue was solved when it had five replies. People still posted another six replies even though they knew the problem was solved. Sometimes I find myself doing the same (Sometimes do not read all the posts). In this case, I will ignore those posts.

For that reason, I never have more than a couple of hundreds of dollars on an exchange because I know that every time I send it, it may be the last time I saw them.

True Indeed. But we think it's not going to happen to us until it happens. People won't use such centralized exchanges if they get NON-KYC Alternatives. Take me as an example; I saw an Escrow service website and they were looking for suggestions from this forum. Its name was Zenland or something similar. I liked their system. I wish we have a non-KYC Platform where we can trade with locals.

[Oneandpure]

I don't read with all agreement term of service from some exchange market exactly with Binance, I were surprised with hidden term of service or user agreement about our account suddenly banned permanent and freeze our assets there. I read in social media about how many people face trouble and their assets freeze suddenly after huge amount withdrawing in Binance.

But don't afraid for trading and saving assets in several exchange market although they have hidden user agreement, due not any rule break seems not problem with our account and keep running well when withdrawing or deposit assets. Have some user when getting freeze their account can access back to normal and they can trade, deposit and withdraw their fund.

[Xal0lex]

I strongly doubt that anyone will even choose an exchanger based on some kind of user agreement. This is not important for many people and they value exchanges for other qualities. For example, KYC, commissions, supported networks, p2p, additional options, variety of tokens, and a bunch of other factors, and user agreements are read by few users and they are interested in the last place. I have never seen a crypto user who said that he chose an exchange because he liked the user agreement more than others.

[Jon_Hodl]

Wow. Excellent post. I'm shocked but also not shocked at all.

This is exactly why I never let any third-party control my private keys. Only self-custody matters but at least these companies can make it possible for you to buy bitcoin and withdraw it to your own wallet.

[Upgrade00]

Because they are too long articles and we miss the critical part where they reported that they could seize user funds for any reason without any explanation. Would you deal with such platforms when they say they can seize your funds for any reason without giving you an explanation?

I wouldn't use the platform if they could seize my funds with an actual reason. I would never want my Bitcoin to be in the custody of a third party.
But for the majority these terms are not hidden, they might no read the entire terms of service but many of them are fully aware that the exchanges control their funds and they trust them with it.

[Woodie]

With such scary terms from these big name's of the crypto exchange industry, am hoping there will come a time when decentralized exchanges will take centre stage again to avoid these unfair term's !
And unfortunately nobody can challenge them with these predatory terms that help give them unfair advantage over individuals small coin holdings...and sad news is they are going nowhere for now as they have the liquidity to support most coins for trading purposes.

[noorman0]

With such scary terms from these big name's of the crypto exchange industry, am hoping there will come a time when decentralized exchanges will take centre stage again to avoid these unfair term's !

DEXs also seek to comply with regulations when required.
In the past Uniswap imposed some geo-bans (I don't know if they are currently still in effect). This means the ban can be re-activated and extended at any time if regulations require it to do so and this is certainly not fair. They have also delisted some tokens upon request.

[Cantsay]

I don't always read long agreements, but if it's short it's either I read it at that moment or I come back later for it when I'm less busy. While for those exchanges above I have an account in two of them which are Binance and Kucoin. Although I admit I haven't read through the user agreement, but the fact that they are centralized exchanges already gives you the ideas that they can control and do whatever they want with your account and also with whatever funds is in it. So funding it with a little amount is the best way to go about it, so that if eventually any thing unexpected should happen you won't have much to loss.

[Doan9269]

We need to understand this fact about centralized exchanges that they can never be or turn to a decentralized one no matter how because they are already a third party exchange, in case you come across some of them offering you a wallet in a decentralized mode don't fall for it and be careful, centralized exchange will always be and nothing can make them not regardless of what they are presenting to offer and they share same risk in common.

[Diornov]

Its name was Zenland or something similar. I liked their system. I wish we have a non-KYC Platform where we can trade with locals.

Yes, we are here. 3 days ago we launched our profile marketplace that can be used as a decentralized OTC exchange service. You can register here https://app.zen.land/ and send the link to your clients (e.g. https://zen.land/@DOTA2_Skins )

Later today we will be making the official announcement on BitcoinTalk.

CEXes don't follow Web3 principles - it's just easier for people to use it. We do hope that one day it will change.

[tvplus006]

...I am pretty much sure 95% of users of these exchanges don't know what is written on their user agreement page. ..

This is not surprising, since most people decide to read the user agreement only when they have already had a problem on the exchange. Obviously, they believe that since others are trading on this exchange, it means that there are normal conditions for a trader and, accordingly, they can also join this exchange.

[MinMan]

I think the title might be a little misleading because User Agreements or Terms and Services are always available for any exchange or other platform but only users don't read them properly. So basically, the texts that are presented in this thread are not "hiding behind" CEXes User Agreement, but they are a part of it.

That being said, I didn't find anything wrong with any of the paragraphs taken and presented here by OP. All of them are saying one thing, if you violate the terms and conditions or break a law or anything similar, then they have all the right to take necessary action. What's wrong with that? I didn't see anywhere where it said that they have the right to seize your account or funds for no reason at all, but it only says that without your consent but only if you break a rule or violate the terms, which isn't something really surprising.

[uchegod-21]

...I am pretty much sure 95% of users of these exchanges don't know what is written on their user agreement page. ..

This is not surprising, since most people decide to read the user agreement only when they have already had a problem on the exchange. Obviously, they believe that since others are trading on this exchange, it means that there are normal conditions for a trader and, accordingly, they can also join this exchange.

This is not only applicable to exchanges, it also applies to other websites and even gambling sites. Many people do not have the patience to read through the terms and conditions.
I don't even know if the project owners tactically made it so long so that it will be unreadable by many.
I cannot remember when last I read the T&C of a company from beginning to the end before signing up.

[Coyster]

That being said, I didn't find anything wrong with any of the paragraphs taken and presented here by OP. All of them are saying one thing, if you violate the terms and conditions or break a law or anything similar, then they have all the right to take necessary action. What's wrong with that? I didn't see anywhere where it said that they have the right to seize your account or funds for no reason at all, but it only says that without your consent but only if you break a rule or violate the terms, which isn't something really surprising.

There is everything wrong with it, but at least for the people who still use exchanges as their "crypto bank", one very crucial reason why people use Bitcoin other than fiat is because they want to control their funds, and they do not want a third party to have an arbitrary control over it, thus if that be the case why should someone give over that control to a centralized service and not hold it themselves, knowing fully well that this cex exchange can take an arbitrary decision about your funds at absolutely anytime.

Having said that, it is the exchange that decides arbitrarily if you have violated any terms, conditions or laws, thus they can seize (steal) your funds for whatever flimsy reason and tell you that you have broken one law or the other; or they lock your funds up and ask you to expose more of your privacy to them through KYC, there is everything wrong with how these exchanges operate, they basically just make money at the expense of their users.

[hd49728]

If they get scammed by your trade partners or fell into legal issues with money laundering from your trade partners in Peer-to-Peer trades, they will only support you if you have official request documents from police offices or banks. That is impossible for people who are living in countries which have yet accept cryptocurrency or Bitcoin.

Because cryptocurrency trades are not legally accepted in their nations, they are unable to inform police or bank that they did those trades by cryptocurrency and get scammed or received those money from a criminal who used stolen money for the trade.

At the end, users will have to shut their mouth and bear the loss by themselves.

[Alpha Marine]

But, regarding exchanges, casinos or where we will spend our money. It is worth reading before you sign up.

I read a similar post a while ago on this forum and since then I vowed to always read the terms of service of every app or site I sign up to. I must admit I have not been able to leave up to that promise. Most times I just get lazy because the write-up is always too lengthy. But when it comes to any site where my money is involved, I always read through the user agreement. I know with time I won't feel lazy to read through them before signing up.