Huobi.com Suspending Withdrawal: Funds Held Hostage due to Monero Transaction

[R4ISE]

Introduction:
I am writing this forum article to address an alarming issue I recently experienced with the cryptocurrency exchange, Huobi.com. I want to share my frustrating encounter with their suspension of my withdrawal and the subsequent withholding of my funds. I suspect this is a deliberate strategy to keep funds hostage, potentially leading to theft, all under the guise of adhering to anti-money laundering (AML) and know-your-customer (KYC) policies. I am curious to know if anyone else has encountered a similar problem with Huobi.com or any other cryptocurrency exchange.

Background:
I had been using Huobi.com for my cryptocurrency trading activities without any major issues until I attempted to withdraw funds after a Monero (XMR) transaction. Despite following the necessary procedures, such as providing KYC documentation and transaction history, my withdrawal request was suspended, and my funds were effectively held hostage.

The Problem:
The most concerning aspect of this situation is the lack of transparency and communication from Huobi.com. I expected a prompt resolution to the issue, considering I had already provided them with the requested KYC documentation and transaction history. However, it has been an extended period, and my funds remain inaccessible.

Suspicion of Deliberate Strategy:
Given the circumstances, it is difficult not to question the motives behind Huobi.com's actions. By keeping funds in limbo, the exchange not only creates frustration and inconvenience for users but also raises suspicions of potential fund misappropriation. The purported reason for this action, compliance with AML and KYC policies, appears to be used as a smokescreen to mask their actual intentions.

Seeking Similar Experiences:
I am keen to hear from others who may have encountered a similar problem with Huobi.com or any other cryptocurrency exchange. By sharing our experiences, we can determine if this issue is an isolated incident or part of a more widespread problem affecting cryptocurrency traders.

Conclusion:
The suspension of my withdrawal and the subsequent holding of my funds by Huobi.com due to a Monero transaction has left me deeply concerned. The lack of transparency and communication from the exchange raises suspicions of their motives and intentions. I hope to connect with others who have faced a similar predicament to shed light on this issue and collectively address it. Cryptocurrency exchanges should be accountable and prioritize the fair treatment of their users, ensuring the safety and accessibility of their funds.

[R4ISE]

Sent them an email:

When the issue is resolved I will take this down. I will from now on start to report publicly about this issue.

https://bitcointalk.org/index.php?topic=5458767.msg62508133#msg62508133

THEY REPLIED:


##- Please type your reply above this line -##
Dear Customer,

Your request (xxxxxxxxx) has been received and is being reviewed by our support staff. If there is any additional comments, please reply to this email.

Note:
1. Huobi shall never ask you for your password or verification code of your Huobi account in any case.
2. If you have any other questions, please send an email to support@huobigroup.com or submit a ticket in Huobi website.

[examplens]

..

I don't want to take sides here, but you haven't presented anything from your side. Have there been any changes in your use of this exchange?
They certainly didn't choose you at random to freeze funds, but something set off their alarm (at least it should be like that in working circumstances). Access from different IP addresses, different devices, a sudden increase in the withdrawal amount in comparison to the account history, suspicious deposit source etc...
It can be quite a lot, be sure to check what you have been doing from "unusual" activities.

[un_rank]

Huobi in the past have delisted Monero and other privacy coins to be compliant with regulatory rules which limits trade of untraceable transactions and those done through mixers. If you have not in the past withdrawn or deposited Monero then they might have some regulation against it.

All these exchanges use their Terms of service to give themselves the right to act in their sole discretion;

"5.2 When this Website finds at its sole discretion that you or your associated account user is not suitable for high-risk investment, this Website shall have the right to suspend or terminate the use of your account and all associated accounts thereof."^[1]

So even without trading a coin that is not allowed they can terminate or suspend your account cause they feel like.

[1] https://www.huobi.com/en-in/about/agreement/

- Jay -

[The Sceptical Chymist]

"5.2 When this Website finds at its sole discretion that you or your associated account user is not suitable for high-risk investment, this Website shall have the right to suspend or terminate the use of your account and all associated accounts thereof."^[1]

So even without trading a coin that is not allowed they can terminate or suspend your account cause they feel like.

But they apparently say nothing about what happens to a customer's funds if they decide to go that route and suspend the account (I did not read the link you provided, but I've read similar statements and found them to be vague on that point)?

But in any case, Huobi is referencing "high-risk investment(s)" which I usually assume to be margin trading with high leverage, etc., not privacy coins that don't introduce any more risk as far as trading goes as any other coin.  In other words, while that statement is doubtless true, I don't think it covers specific coins and certainly not Monero.

OP, I know of Huobi by name only and have never used them, thus I don't have a bias in your case.  I agree with examplens that more info is needed if there is any that would have influenced them to freeze your funds.  I do wish you the best in getting them to un-freeze them, and whatever the outcome is please keep the community updated if you would.  People like you speaking up when they're having trouble with exchanges helps a lot of people, whether you realize it or not.

[Z-tight]

I am curious to know if anyone else has encountered a similar problem with Huobi.com or any other cryptocurrency exchange.

This problem is common with centralized exchanges and you're not going to look too far in finding people who have encountered this, or lost their money because it was confiscated and never released. Centralized exchanges are anti-privacy so they usually have a problem with privacy coins, mixers or CoinJoin transactions. I don't use Huobi, but they delisted 7 privacy coins last year, and Monero was one of them, i believe this has something to do with your seized funds.

I hope to connect with others who have faced a similar predicament to shed light on this issue and collectively address it. Cryptocurrency exchanges should be accountable and prioritize the fair treatment of their users, ensuring the safety and accessibility of their funds.

They are accountable to the government and blockchain surveillance companies . I'm sorry there's no way to address this, you have to be patient and wait for their decision, they have your funds and its keys and so they control it.

[logfiles]

Huobi in the past have delisted Monero and other privacy coins to be compliant with regulatory rules which limits trade of untraceable transactions and those done through mixers. If you have not in the past withdrawn or deposited Monero then they might have some regulation against it.

But I have a Huobi account, and they do allow depositing of most privacy coins that I know like DASH, Zcash, Monero including even trading them on the spot markets. I don't think they were delisted


OP if you want to use privacy coins, avoid such centralized exchanges. It makes no sense using a Privacy coin only to send it to a centralized exchange that will ask for KYC. Your privacy and anonymity will be unearthed.
Use

1. bisq.network
2. LocalMonero.co
3. hodlhodl.com
4. unstoppableswap.net

More exchanges can be got here: https://www.getmonero.org/community/merchants/ or here https://kycnot.me/

[Darker45]

How come you seem certain that this is caused by a Monero transaction? I assume Huobi didn't mention it as the cause? Post hoc ergo propter hoc. It doesn't mean that since you had a Monero transaction prior to your failed withdrawal, it must be the Monero transaction that caused the withdrawal to be rejected.

I don't know which country you're from and if there's a particular ban on privacy coins, but Huobi still supports Monero. Traders could still trade XMR on the platform, albeit with a single pair only, if I'm not mistaken.

We'll probably wait for Huobi's response to your communication. If it takes too long, you could send a follow-up.

[Potato Chips]

Background:
I had been using Huobi.com for my cryptocurrency trading activities without any major issues until I attempted to withdraw funds after a Monero (XMR) transaction. Despite following the necessary procedures, such as providing KYC documentation and transaction history, my withdrawal request was suspended, and my funds were effectively held hostage.

Did you have a prior communication with Huobi? if so, please also tell us more about that.

Under normal account verification - when someone tries to increase their limits at their own will and not because the exchange told them to before they could continue, AFAIK, no CEx ask for transaction history, hence my next conclusion is huobi asked this in relation to your case which would mean you talked to them before. What did they say?

I agree with the others, if you want the community's backing, you have to let us know the whole picture and back your claims with some sort of evidence.

[R4ISE]

..

I don't want to take sides here, but you haven't presented anything from your side. Have there been any changes in your use of this exchange?
They certainly didn't choose you at random to freeze funds, but something set off their alarm (at least it should be like that in working circumstances). Access from different IP addresses, different devices, a sudden increase in the withdrawal amount in comparison to the account history, suspicious deposit source etc...
It can be quite a lot, be sure to check what you have been doing from "unusual" activities.

Thank you for your input and valid points. I understand that I didn't provide enough details initially, so let me address your concerns.

Regarding changes in my exchange usage, I opened a new account without going through the initial KYC process. However, the exchange clearly stated that KYC was not required at the time. It would be helpful if they communicated that funds might be frozen and KYC might be necessary in certain situations.

I acknowledge that exchanges have security measures to combat fraud and comply with regulations. However, despite providing all requested information and cooperating fully, my funds of approximately 1,000 USD remain inaccessible. This is concerning, considering the relatively small amount involved.

I had a similar experience with Binance in the past, where it took several months to resolve a larger fund freeze issue involving around 20,000 $ in BTC. These recurring situations raise concerns about exchanges' power over users and the delays and frustrations in resolving such matters.

While I understand the need for security measures, exchanges should communicate clearly, provide timely resolutions, and minimize inconvenience. Transparency and open dialogue are crucial for building trust and ensuring a positive user experience. A copy past massage from support is just not doing it.

By sharing my experience, I hope to address these issues collectively, encourage exchanges to improve processes, prioritize customer satisfaction, and find a balance between security and fund accessibility.

Thank you for your valuable perspective and contribution to this discussion.

[R4ISE]

How come you seem certain that this is caused by a Monero transaction? I assume Huobi didn't mention it as the cause? Post hoc ergo propter hoc. It doesn't mean that since you had a Monero transaction prior to your failed withdrawal, it must be the Monero transaction that caused the withdrawal to be rejected.

I don't know which country you're from and if there's a particular ban on privacy coins, but Huobi still supports Monero. Traders could still trade XMR on the platform, albeit with a single pair only, if I'm not mistaken.

We'll probably wait for Huobi's response to your communication. If it takes too long, you could send a follow-up.

Yeah they actually did. They said I used I quote "ANONYMOUS COIN". War on privacy is real sadly.

[hugeblack]

AFAIK, no CEx ask for transaction history, hence my next conclusion is huobi asked this in relation to your case which would mean you talked to them before. What did they say?

Not transaction history, but they have a degree of risk that increases whenever the coins come from a gambling withdrawal address, scam, mixing service, coinjoin, or anything that enhances the red points, I do not know how to measure those points, but you can use some explorers to check the degree of negativity of your coins.

By sharing my experience, I hope to address these issues collectively, encourage exchanges to improve processes, prioritize customer satisfaction, and find a balance between security and fund accessibility.

Thank you for sharing your story and I understand it, as I have some coins that have been frozed due to the need to complete KYC L2, these CEXs are global and therefore it is difficult to initiate legal proceedings against them, so it is better to avoid any centralized platform that does not have a license from your country.

[Darker45]

~snip~

Yeah they actually did. They said I used I quote "ANONYMOUS COIN". War on privacy is real sadly.

Whoa! Really? But they're still offering a Monero pair in their trading platform? And Dash and Zcash and others. Users can still deposit, trade, and withdraw these privacy coins. How come they flag a user having a transaction with Monero when they're still supporting Monero until now? I'm confused.

Or is this something that only applies to certain users like you who happen to be residing in a country where anonymous coins like Monero are illegal or banned? But even so, they should remove these anonymous coins altogether rather than keep them there and suspend users' activities for using them.

What did you tell them, by the way?

[MusaMohamed]

I had been using Huobi.com for my cryptocurrency trading activities without any major issues until I attempted to withdraw funds after a Monero (XMR) transaction. Despite following the necessary procedures, such as providing KYC documentation and transaction history, my withdrawal request was suspended, and my funds were effectively held hostage.

One year since the announcement, they did not delist Monero. They only delist Monero perpertuals.

They did not stop deposit of Monero and it's bad when I did not find any article, blog from Huobi about account suspension, advanced KYC if a user deposits through Monero.

The lack of transparency and communication from the exchange raises suspicions of their motives and intentions.

Using centralized exchanges with deep concerns about safety of your accounts and your coins.

Not your keys, not your coins and centralized exchanges always own keys and coins. They can free or terminate your account anytime and sure when they do it, they steal your coin.

Huobi Clamps Down on Crypto Wash Trading After Bitwise Report
Bitwise report

Livio Weng, CEO of Huobi Global, told CoinDesk through a spokesperson that the exchange "is not involved in any wash trading," and any such actions would go against the exchange's "core values."

A report by Bitwise Asset Management which implied that Huobi reported inflated trading volume "surprised" its team, he said, and the exchange "subsequently did a thorough check and review of our system."

Whoa! Really? But they're still offering a Monero pair in their trading platform? And Dash and Zcash and others. Users can still deposit, trade, and withdraw these privacy coins. How come they flag a user having a transaction with Monero when they're still supporting Monero until now? I'm confused.

They still have Monero for Spot trading so they are shady.
https://coinmarketcap.com/exchanges/huobi/
https://www.huobi.com/en-us/trade/xmr_usdt

[Potato Chips]

AFAIK, no CEx ask for transaction history, hence my next conclusion is huobi asked this in relation to your case which would mean you talked to them before. What did they say?

Not transaction history, but they have a degree of risk that increases whenever the coins come from a gambling withdrawal address, scam, mixing service, coinjoin, or anything that enhances the red points,

Yes, but I was talking about "Under normal account verification". To put it simply, it's the verification tier requirements that applies to everyone once registered e.g. First level = ID + selfie (example), Second Level = this and that

If a CEx ask to provide supporting information (e.g. transaction history) in relation to someone's deposits/withdrawals, that would fall to additional checks/requirements, no?

I do not know how to measure those points, but you can use some explorers to check the degree of negativity of your coins.

What explorers to be exact? - I'm kinda interested to know for future use lol

Do they work similar to amlbot.com?

[tabas]

Yeah they actually did. They said I used I quote "ANONYMOUS COIN". War on privacy is real sadly.

I don't understand why they're like this. They could have just delist the main reason of why you've been suspended so that it won't be a problem to most of their customers. Since many exchanges have been complying to their government's rule about these anonymous coins, their main option is to just remove it from their platform. It's sort of funny that the main reason is about your monero transaction and yet, it's on their platform and I doubt it that they'll even be more specific soon if it's come to this transactions.

[Solosanz]

Or is this something that only applies to certain users like you who happen to be residing in a country where anonymous coins like Monero are illegal or banned? But even so, they should remove these anonymous coins altogether rather than keep them there and suspend users' activities for using them.

There's no such like that, all governments don't like about privacy, so it means every countries not allow any privacy coins. Centralization always been a problem in the first place, even though they give a non sense reason to terminate or confiscate your funds, you can't do anything because they have 100% control over your account and money.

Making a deal or communicating with someone who have higher position and power than you always give an unfair result.

[R4ISE]

Quick update on the situation. Funds still stuck.
Customer support blocks now fully and just answers with copy paste massages.

I think I can write off those funds.

[yhiaali3]

It is clear that the problem is mainly related to privacy and that the main reason for suspending the withdrawal is because of the Monero transaction, but I am wondering if Monero is listed in Huobi trading why would they suspend the withdrawal? Was the Monero transaction "spot trading" or P2P?

Unfortunately, all central platforms are fighting privacy to please governments, all global platforms are tending to impose more restrictions on privacy and the application of KYC, AML regulations because of their fear of governments, so there is currently no solution but to avoid trading in CEXs.

[R4ISE]

ANSWER FROM HUOBI:

I even explained them for what the transaction was, showed them a screenshot of a telegram communication.
Send them this for about 5 times. LOL

This is the answer of them.. Slowly but surely getting a joke and as well out of hand. I spend until now easily 3-5 hrs on this thing.
Feeling like they do not care really about where the money really comes from and for what it should be used, but more to find a reason to get the people so pissed off that they say fuck it. 

Hello, sorry, the purpose of this transaction cannot be determined from the communication records you provided before.
If it is payment for marketing services, please explain what services you provide?
Signed service agreements and agreed fees and other information.
And please provide the video of yourself holding the certificate, thank you for your understanding and support.



I am just wondering - the money in this account, what is going to happen with this money? Are they keeping it? Do they give it away?
I mean think about it, they got a HUGE userbase. If they do this a thousand times with amounts around 1k$ where people say after a certain time fuck it.
That's a million dollars they pocked.

Does someone have background information what they do with those funds?