Exchange warning about using crypto for gambling

[mindrust]

Do not use centralized exchanges unless you really have to folks. Don’t use them and certainly don’t keep big amounts on them for a long time. Bitcoin transactions are visible to anyone and you are a fool if you think they don’t analyze your transactions. How to protect yourself? By giving them nothing. As long as you don’t touch a damn centralized exchange which asks KYC, nobody can attach your identity to your addresses and believe me, that’s exactly what you want when dealing with crypto. Be smart. Use decentralized and/or no-KYC services.

[Awaklara]

I went checking the terms and conditions and it is true that they do mention internet gambling as one of the prohibited activities.
Thing is, gambling is allowed in my country of residence.
Plus, the gambling sites I use are big known names, with valid licenses, not shady casinos.

I still don't understand how in a country that legalizes gambling but the exchange platform regulates gambling as one of the prohibited activities.
Maybe the exchange has its own policy to determine the flow of transactions on its platform by excluding the flow of funds from gambling.

If you get a warning of course it is related to a possible violation involving your account. You should be more careful, or maybe you can use another exchange. But it would be better to use a decentralized exchange, using an intermediary wallet will not change everything. because transactions can be traced by everyone.

[Solosanz]

I went checking the terms and conditions and it is true that they do mention internet gambling as one of the prohibited activities.
Thing is, gambling is allowed in my country of residence.
Plus, the gambling sites I use are big known names, with valid licenses, not shady casinos.

My question, what's the regulation about online casino in your country? what's the criteria of legal and illegal online casinos? if possible is there any list of legal online casino in your country.

You have to know that, if you country allow gambling and the gambling sites allow your country to gamble, that's not enough.

Anyway it's not surprising to see exchange prohibit source related to casino, just like how banks restrict source related to cryptocurrency, sometime they have ridiculous rules.

[CryptoYar]

[...]

Sending funds directly from the exchange to a gambling website may cause you issues.

I think you should do this first you purchase crypto from the exchange using your debit/credit card then you withdraw those funds into a wallet and send it to where you want to gamble.

Exchange>> Your wallet >> gambling website.

[Ziskinberg]

Exchange>> Your wallet >> gambling website.

It could help minimize the risk, but it’s still not completely safe. If the exchange is checking where the money is coming from, they might trace all the sources, and with personal wallets, it’s easier to link previous transactions. I don’t know, but it still feels risky to me. The best way to really handle this is through a mixer or CoinJoin for better privacy.

[salad daging]

So you deposit fiat into exchanges and withdraw crypto into gambling?

So far I have not encountered this kind of problem, but in the past there was a problem where there was a warning from the exchange about deposits from gambling, but after filling out the form provided, it is now normal, which means there is no problem (Binance) is an exchange that is often used.

But if you already know that the exchange has banned gambling (deposits/withdrawals) then you should stop using other exchanges I think there are many other exchanges that accept funds from gambling.

[Eternad]

Have to be careful now so it seems as for sure I will be monitored thoroughly now.

Did this happen to anyone else?

Would using an intermediary wallet to receive gambling funds be the solution?

Can you mention what specific exchange that has ToS like this. I’m not aware that some exchange prohibit gambling funds since I frequently use exchange to deposit directly on my casino wallet for more than 8 years with same exchange which is Binance.

I knew that mixer is the one that being prohibit but not casino funds at least on my knowledge

[nelson4lov]

~Snipped

Did this happen to anyone else

Yes. It happened to me once. In my case, I withdrew from my gambling account to my exchange account and I got asked by support to provide some more details. So yes, almost all top exchanges prohibit depositing/withdrawing from/to gambling platforms to their own platforms.

Would using an intermediary wallet to receive gambling funds be the solution?

Ya. Just do it like this:

Gambling platform <> Own wallet <> Exchange account.

These exchanges don't just want to be tied directly to gambling platforms. Once you avoid that, you're good to go.

[$weetne$$]

Do not use centralized exchanges unless you really have to folks. Don’t use them and certainly don’t keep big amounts on them for a long time. Bitcoin transactions are visible to anyone and you are a fool if you think they don’t analyze your transactions. How to protect yourself? By giving them nothing. As long as you don’t touch a damn centralized exchange which asks KYC, nobody can attach your identity to your addresses and believe me, that’s exactly what you want when dealing with crypto. Be smart. Use decentralized and/or no-KYC services.

People can still be smart about it when making use of centralized exchanges because I do not think people can survive without making use of centralized exchange because people need it for trading of any cryptocurrency to the fiats of the country they are living in. Most people can not survive without the help of centralized services or people that gamble like myself, it is better to withdraw from the casino to your own wallet first and then you can move the cryptic to the exchange for trading or converting to any cryptocurrency of your choice. Exchanges are just trying to avoid charges from the government

[PX-Z]

Am a sports gambler for many years, I know, it is a vice but my only one and I gamble with my hard-earned money.
This week I received a warning from a big exchange about the fact that I deposited fiat and immediately withdrew to a gambling site.
Well, I have been doing this as well for many years and so far there was no complain from their side.

I thought this is a common knowledge to don't deposit any amount from gambling to an exchange? Even exchange to exchange transfer too since you can't prove your ownership once a problem occurs, well, this is different story.
The former should always be taken into account regardless if the platform didn't inform you instantly after doing such transaction. It should be always non-custodial wallet to gambling or to an exchange, or to any service to avoid any issues like this and to prove ownership.

[Potato Chips]

Can you mention what specific exchange that has ToS like this. I’m not aware that some exchange prohibit gambling funds since I frequently use exchange to deposit directly on my casino wallet for more than 8 years with same exchange which is Binance.

I knew that mixer is the one that being prohibit but not casino funds at least on my knowledge

Binance actually has a clause that prohibits gamba activities.

26. Prohibited use

f. use Binance Services to conduct or participate in lotteries; gambling activities; bidding fee auctions; sports forecasting or odds making; fantasy sports leagues with cash prizes; internet gaming; contests; sweepstakes; or games of chance, to the extent prohibited by Applicable Law;

From what I've seen it has been a hit or miss with gamblers. There are those who apparently was flagged and those who were fine. The latter actually includes me too lmao though I've never depo'd and withdrew directly. Essentially, I don't believe any exchange has a 100% accurate trigger system in place hence, the hit and miss.

Interestingly, my vague memory tells me there was a time binance had no such clause as well. I could be wrong though—emphasis on vague memory.

[doomloop]

It's not a problem as long as it's from exchange to gambling site and it is not prohibited but what is prohibited is depositing funds from casino to exchange which can leads to account suspension/termination. So if you did in the past then just keep using the account as long as they allow you to because the termination can happen on random with no prior warnings.

And if we notice, some gambling site lets you buy a coin to the exchange without going out on their platform. For the other, I think I have done that before but it was a long time ago where things are not strict yet. For us to be sure, we need to read the casino's terms and conditions first before doing such action.

And using intermediary wallet is not enough, the exchange can go and track the origin to a few layer as part of AML procedure.

Oh they will? But, I think this only applies to those who are guilty or highly suspicious, while if we only play gambling, then it should work just fine.

[Strongkored]

Did this happen to anyone else?

Usually the problem is when depositing money to the exchange from the casino not the opposite and I have never deposited money from the casino to the exchange or maybe I have but only a few times but after that I never did it and when withdrawing from the casino I will put it in my wallet and will only sell on the exchange when I need it because usually the money from the casino will only be used to play again at that casino or a different one.

Would using an intermediary wallet to receive gambling funds be the solution?

Maybe this is a solution or you can use DEX if you intend to sell the results of your gambling.

[Butterfan]

Yeah this is actually becoming more common nowadays. Even though gambling is allowed in your nation and the platforms are properly licensed, several exchanges are tightening their policies either due to pressure from regulators or their own internal risk management. The fact that you're properly confirmed and your purchases are well within your means doesn't always help when they apply blanket regulations.

I think Using an intermediary wallet can serve as a workaround but it comes with its own concerns. If they see regular withdrawals to that wallet followed by on-chain transfers to gambling sites, they could still flag your account. It might delay the issue but not necessarily fix it.  I think the safest approach currently is to consider adopting platforms that are more amicable toward this kind of use or keep your gambling activities completely separate from your main exchange. Just be cautious since once you're identified it’s hard to reverse that perception.

[michellee]

That can happen to others because the regulation now become strictly. The exchanges will monitor all of the deposit from their users and check from where the funds come. If they found the deposit come from gambling or illegal source, they will warn you. The worst scenario is the exchanges can block your account and need you to clarify what you have done before.

Sometimes, exchanges don't update their T&C and warn us if they found that matters. They can do that because that is their business and all users must follow their regulation. So in this matter, using an intermediary wallet to receive gambling funds would be the solution. Or you can use P2P and send the funds to your exchange.

[GreatArkansas]

(.....)
Did this happen to anyone else?

Would using an intermediary wallet to receive gambling funds be the solution?

I heard one local exchange like this from our exchange, like if your outgoing transaction is worth more than $900 USD, they are asking for some information and putting the transfer on hold, like some information about who the receiver is, etc. I haven't tried this yet, but more likely the same with your case.

I think using an intermediary wallet that you own is a good idea as long as they have already sent it, and they are already safe, but your account could be in danger if they still care on the funds after you transfer it out from the intermediary wallet.

[hd49728]

I heard one local exchange like this from our exchange, like if your outgoing transaction is worth more than $900 USD, they are asking for some information and putting the transfer on hold, like some information about who the receiver is, etc. I haven't tried this yet, but more likely the same with your case.

I think using an intermediary wallet that you own is a good idea as long as they have already sent it, and they are already safe, but your account could be in danger if they still care on the funds after you transfer it out from the intermediary wallet.

I only think of concern about origin of your deposit fund that is more important for centralized exchange to have good AML enforcement on their exchanges.

They only need to consider about a withdrawal if a receiving address is well known as from a mixer, that is the only case I think possible for triggering their AML bot with withdrawal. For withdrawals to non minder addresses or non sanctioned address, there is no reason for asking such question rather than intention to scam users through AML card.

[2Pizza410000BTC]

(~)
Did this happen to anyone else?

Would using an intermediary wallet to receive gambling funds be the solution?

If you have received this kind of warning message from an exchange platform, then you can feel free to send money from your own wallet to the gambling platform. I have deposited money from the exchange platform to the gambling platform, in that case, I did not receive this kind of warning message from the exchange platform. Maybe they sent you a warning message for your safety, but I think you will not have any problems, you can deposit money from the exchange itself. Also, if you have any problems, you can talk to the exchange platform team directly and get everything cleared up.

If you think so, you can definitely solve it by using an intermediary wallet to accept gambling payments.

[letteredhub]

Do not use centralized exchanges unless you really have to folks. Don’t use them and certainly don’t keep big amounts on them for a long time. Bitcoin transactions are visible to anyone and you are a fool if you think they don’t analyze your transactions. How to protect yourself? By giving them nothing. As long as you don’t touch a damn centralized exchange which asks KYC, nobody can attach your identity to your addresses and believe me, that’s exactly what you want when dealing with crypto. Be smart. Use decentralized and/or no-KYC services.

Your address is a good one as long as anyone would want to prioritise their privacy, but aside centralized exchanges  are there no other centralized online platform we're using that our identity are already with them? It's a true fact that cex can't be trusted and people shouldn't leave big sums of cash with them but there's a roles cexs are playing in helping keeping the crypto ecosystem in motion. It's about users being cautious of the type of sizes of transactions they choose to make on cex and Dex, if they can demarcate it then it would be better for them. But sincerely, we can't entirely escape centralized platform usages.

[hd49728]

If you have received this kind of warning message from an exchange platform, then you can feel free to send money from your own wallet to the gambling platform. I have deposited money from the exchange platform to the gambling platform, in that case, I did not receive this kind of warning message from the exchange platform. Maybe they sent you a warning message for your safety, but I think you will not have any problems, you can deposit money from the exchange itself. Also, if you have any problems, you can talk to the exchange platform team directly and get everything cleared up.

I think very differently than you.

If I receive such messages, I'd like to withdraw my money in an account on that exchange to either my non-custodial wallets first, before broadcasting it to my gambling accounts.

It is risky and kind of suspicious if I withdraw all my fund from that exchange to a gambling account that was already flagged by the exchange system. Withdraw it to one or some non-custodial wallets is a safer choice. It's my keys, it's my coins; and the exchange did not flag those addresses in my non-custodial wallets.

Or I can create completely new non-custodial wallets as destinations of my withdrawal.

After receiving red flag, and continuing to store your fund on the exchange, or continuing to withdraw it to a gambling account, is too risky, that I would avoid as most as possible.