Bitcoin withdrawal suspension saga: why self custody is the best

[Abu-Naim]

Kucoin exchange can be troublesome here and you will have to provide so much personal information to have access to ones account again, speaking from a friend experience. Custodian wallets should be avoided by all means, we keep speaking about this and it's ironic people in the forum are not even giving listening ears to it. Do not send send CEX address for payment or withdrawal, except maybe the business specifically stated this which is even rear. You can maybe move from your own wallet to your CEX if need me for you but making it your main wallet will lead to regret in the long run mostly.

Exactly, a lot of due processes are required to get your account unbanned, the documents they asked for is far way worse than KYC, you will have to submit a lot of document with your personal data which shouldn’t be so just to recover your account. However, it is their right to make sure they protect their customers from phishing attacks so as to protect their customers in their own away.

It’s our fault that we used the Exchange to receive our payment; although it was since when network congestion in the mempool was very high and it leads to a very slow transaction, therefore, we changed to exchange wallets to have easy access to our Bitcoin.

This should serve as a lesson for us that we can’t still rely on centralized exchanges again; they can act funny anytime and they can restrict you from using your money at your own will which is what just happened.

[Kavelj22]

Honestly, this is a strange situation. Almost i know how much risk involved with using exchange addresses to use for personal payments outside the exchange, but never expect such an incident to rise flags in this way. From what i can understand, did the exchange flag the transaction because the similarities in the two input addresses? But this should be commun to happen even in rare cases.

For everybody, please stop using exchange addresses as your main official wallets. Not your keys not your coins.

[LucyFurr]

The thread was explaining why users had their withdrawals suspended and why it is important to use self custody all the time. I didn’t say they used centralized exchange or that both accounts were wrong, but rather was again advocating other participants for more use of self custody to further prevent situations like this.

What I can see is that two addresses looked similar, so mempool showed a warning that it can be an address poisoning and even if it is the exchanges don't suspend all the addresses linked in the txid that is ridiculous if it is real and I don't think there is any reason for an exchange to do that.

How did you get that information? Is there any place the exchange mentions about blacklisted transactions?
All I see is two similar addresses show mempool show a warning like it could be an attack but if it's actually two different addresses, then there should be no problem with that. Certainly, exchange's blacklisting seems weird to me.

You can simply check or verify this by actually looking at rainbet signature thread and see that some members changed their addresses. Maybe you can see how I got the information

What I am seeing is some people requested their address to be changed but no one mentioned anything about suspension of kucoin exchange or address poisoning that is why it is really confusing why you came into such conclusion?

[goldkingcoiner]

So of recent many people got there withdrawal suspended due to a potential poisoning address attack after receiving payment for rainbet campaign managed by Hhampuz, this is common with KuCoin exchange users

More proof that this custodial abuse will keep happening until people realise that using those platforms does not conform with Bitcoin's philosophy of being your own bank. The built-in privacy and self-custody of a decentralised currency cannot co-exist with a third-party custodian. The third party will always find a way to take your money away from you by using regulation or terms of service as an excuse. And it happens daily - look at the complaints and bad reviews and you will see a pattern appear. Centralised exchanges are digging their own graves with their overzealous over-reaching.

Is this not why Bitcoin was created in the first place? To get away from this kind of suffocating, hostage-taking of our financial freedom by the banks?   And now what do we do? We give the "new banks" (aka crypto exchanges) our cryptocurrency instead of holding on to it ourselves...

If you put money into a centralised exchange you might as well just keep using fiat and forget about cryptocurrency altogether.

[Asiska02]

You can simply check or verify this by actually looking at rainbet signature thread and see that some members changed their addresses. Maybe you can see how I got the information

What I am seeing is some people requested their address to be changed but no one mentioned anything about suspension of kucoin exchange or address poisoning that is why it is really confusing why you came into such conclusion?

I don’t see the reason why they need to mention that in the thread that they want to change the address. It is such a coincidence that what the OP is saying is actually right about KuCoin suspending their accounts and users changing their wallet addresses on the same campaign.

We rarely see campaign participants of the same campaign in numbers changing address all at the same time, so OP is actually right and the need for them to stop receiving payment in that address henceforth to avoid not having access to their money. If they follow up the case, the accounts will be free from suspension.

But it is still better to stay off centralized platforms because you can’t tell when they’ll come at you again after receiving another money, they could just ban your account and never release the funds to you.

[tabas]

If I haven't read the other posts, I might have misunderstood it that they're using an address directly from kucoin. And the exchange have suspended it due to that. Well, they have that rule about suspending and freezing someone's account if they're from casinos, mixers and other potential tagged bad businesses based on them. But with address poisoning, it seems that they have automatically flagged it if they're using mempool.space's API and analysis.

[Hyphen(-)]

If I haven't read the other posts, I might have misunderstood it that they're using an address directly from kucoin. And the exchange have suspended it due to that. Well, they have that rule about suspending and freezing someone's account if they're from casinos, mixers and other potential tagged bad businesses based on them. But with address poisoning, it seems that they have automatically flagged it if they're using mempool.space's API and analysis.

That’s the main reason why they flagged the accounts, the exchange wanted to protect their customers from losing funds that is why they flagged the accounts in order to get the customers attention to tell them the reason why the transaction happened in the exchange.

They have their policy of not receiving deposit from some casino platforms and some mixers but this is entirely different because they don’t have genuine reason for the suspension but I am sure they will unfreeze their accounts after maybe submitting some important documents to prove the ownership of the wallet and maybe a reason for the deposit of the money.
Some users will not even bother to go further to report because they might not have money in there again considering the time the transaction was broadcasted because most of the signature campaign users do send out the money immediately.

Nevertheless, we need to learn from this; exchanges are not reliable anymore, some of us that changed to exchange during that high transaction fee and network congestion should try and make some changes to avoid such problem.

[moneystery]

That's why receiving your payments directly to your non-custodial wallet is much better than receiving them through an exchange wallet. You never know when the exchange might change its rules, whether it's regarding minimum deposits, freezing your account, changing your exchange address, or anything else, since the exchange has full control over your account.
After this, these people should realize their mistake and start switching to using non-custodial wallets for their payments. As for fees, I think they're now lower and won't be a burden on them, and compared to their weekly payments, it's actually much smaller.

[Smartvirus]

what I noticed from the last week payment transaction fdf3ebb10508808c3cde9df6b99a3af60b2cb820020a993b6094f87f5e60471b was that it was flagged to be address poisoning as shown in the image due to two similar addresses in the output.

KuCoin exchange has actually suspended the withdrawal of funds from their customers who Recieved bitcoin together with this addresses

In as much as we all know this was a coincidence nobody’s problem it shows that self custody should be adhere to seriously when receiving bitcoin.

Most of us who used KuCoin and other exchanges to recieve payment need to take note that there are many risks involved because of some exchanges policy and it is best to use wallet and then probably move your bitcoin out from the wallet to exchange to sell. This is usually the best practice when Receiving bitcoin.

I really wouldn’t get it why people would prefer to use exchange addresses in receiving payments and not have to send it there themselves from a custodian alternative.

Perhaps it could be the fees but, I find that to be a very lame or dumb excuse. It doesn’t cost much on fees these days, it’s always ranged between 1-10sat/vByte and you would have your transactions processed really fast.

Should it be concerns on privacy and accumulations on an address, you could always send between wallets and maybe use the services of mixers if it’s of great concern.

Receiving payments on exchanges shouldn’t be a thing.

[OcTradism]

I really wouldn’t get it why people would prefer to use exchange addresses in receiving payments and not have to send it there themselves from a custodian alternative.

They either don't know about custodial wallet and non-custodial wallet, importance of private keys or they knew about these things but don't mind to follow recommended practice.

Perhaps it could be the fees but, I find that to be a very lame or dumb excuse. It doesn’t cost much on fees these days, it’s always ranged between 1-10sat/vByte and you would have your transactions processed really fast.

Convenience and saving in transaction fee are two main reasons. By using an account on a centralized exchange, its account's Bitcoin address for receiving signature campaign payment, they will not have to broadcast any on chain transaction and don't have to pay extra on chain transaction fee.

They have such a reason but if they know about risk of centralized exchanges, they would have different practice.

Reminder: do not keep your money in online accounts.

[Smartvirus]

I really wouldn’t get it why people would prefer to use exchange addresses in receiving payments and not have to send it there themselves from a custodian alternative.

They either don't know about custodial wallet and non-custodial wallet, importance of private keys or they knew about these things but don't mind to follow recommended practice.

Maybe if it wasn’t coming from users on the forum, I might find this assumption very welcoming but, when it’s from users on this forum, ranked up users that have found their way to enroll on a signature campaign, I think not. They must have knowledge of these things, know the difference and to some extent, the pros and cons but choose to ignore it all the same. The forum is filled with several subjects addressing some of the dangers that can arise from these sort of behavior but, some users would always cast their lots not minding the risk till it happens.

Some exchange would even refund these kind of transactions back to the sender address and if it were in a business deal that you have confirmed, it would be lost to you.

[Ronsbit]

Is this not why Bitcoin was created in the first place? To get away from this kind of suffocating, hostage-taking of our financial freedom by the banks?   And now what do we do? We give the "new banks" (aka crypto exchanges) our cryptocurrency instead of holding on to it ourselves...

If you put money into a centralised exchange you might as well just keep using fiat and forget about cryptocurrency altogether.

People always want to learn things the hard way. After being privileged to be able to have a system where one can control their assets and funds independently without any third party, they still do not like that; they prefer to give it to a third-party exchange to help them do that. It is when something happens that is when they realize they need to control their assets themselves. I see no difference between such actions and the fiat system because it is similar in nature, but only that this is crypto, but their actions are still the same, so why not make use of the fiat system rather than wasting time with the crypto exchange, because the exchange works similarly like the banks but in a well packaged and upgraded way backed by the government.

[lionheart78]

Firstly I see no reason why someone on this forum that has ranked enough to be in a signature campaign would receive bitcoins directly to their exchange address and worse of it all a centralized exchange. With all the endless threads and discussion about privacy and decentralization I think it's high time many were already properly informed about these things.

I can see the reason behind the use of a centralized exchange address, and that is to save both fee and time when converting their Bitcoin to fiat currency.  Although using a centrlized exchange address in the signature campaign is not wise, it is not forbidden.  Besides, one can't push their belief on someone else, especially when the user truly trusts the exchange.

There are alot of things to be learnt from discussions here and the least and most of recurring of them all is the gist concerning privacy and decentralization.

Yeah, I think the two participants will have a hard time explaining their case on the centralized exchange. I hope they can fix their withdrawal suspension soon.

[joniboini]

Besides, one can't push their belief on someone else, especially when the user truly trusts the exchange.

That's true. I lost count of how many posts I saw from my peers discussing the use of an exchange address for the sign-up campaign. Most of them seem to know the risk, but they probably think that they're quite confident it won't happen to them for whatever reason. That being said, I think it's still worth telling them the risk every now and then because education is the key to increasing awareness. How many times have we seen database leaks or users storing their seed phrase online? It can be tiring repeating what we said, but it's necessary for the benefit of the community.

[Kelward]

I wonder why campaign perticipants can't use a none custodial wallet to receive their campaign payments, it costs nothing except data to create one. One of the biggest lessons that I've learnt in this forum is not to store your Bitcoin in an exchange because if it's not your keys it's not your coins. This should be a lesson to them and others that are still using exchange addresses to receive payment that it's not the best option. I hope that the issue is resolved soon and they can be able to access their accounts, hopefully they will do the needful and change their campaign wallet addresses.

[The Cryptovator]

As far as I know some exchanges don't accept funds from gambling and mixer sites. So there is a high risk in accepting signature campaign payments on the exchange address. KuCoin detects address poisoning, but both addresses are different. But the user has to suffer now in such a case. I have learnt a lesson not to accept payment even from the client to the exchange address. If something went wrong, then your funds would be seized. This won't be good practice for high-ranked users when they know about potential risk.

I have been using a noncustodial wallet to receive my signature campaign rewards. If Bitcoin pumps and I need to sell my holdings, then I move the funds to the exchange. Otherwise, just hold on to the noncustodial wallet. I don't use any exchange address directly to accept my payment. It's pretty risky for me since I have suffered once.

[GeorgeJohn]

Many forum members has been campaigning of not store your bitcoin with exchange address but many of us continue to ignore such information, it seems that many information tender here some of us doesn't value such,

Is not ideal that someone who has spent more than a year in forum will be that ignorant of tendering he or her exchange address as address for receiving a payment from a signature campaign..even though both of addresses doesn't looks similar or having delivery delay on the exchange, it's not proper to use exchange to store bitcoin because some exchange do regeneration of address, and if the information have not reached at moment and you change your address with that moment they will be no Bitcoin send to that address that will reflect to the wallet..Secondly an exchange can be hacked at any time.

[Gozie51]

Too many threads and too many suggestions already that don't directly use an exchange address to receive payments from signature campaigns, use a non-custodial wallet then send it to the exchange they want for safety and security purposes, why people cant get it.

I do agree, I can't fathom that someone in a campaign is using a centralized exchange to received their payment?

I call it lazyness and too much trust to a central platform since it didn't happened before

Actually I think this is not about laziness or threads that have been opened about some of this mistakes, errors cum normal way to go about cryptocurrency and wallets, I think some people don't just understand what they are doing or writing about yet they are contributing to threads. It is a different thing to contribute and to know what you are contributing on. That exchange is divided into two as decentralized and centralized, meaning you have control of anything decentralized like bitcoin for example and you don't have control of centralized like kucoin as the current issue including its wallet. So using kucoin wallet address to receive signature payment means you don't have control over it. That's appalling for someone making such mistake to their own detriment.

However to the issue, I think it is a lesson to those who are still having their coins on CEX. The earlier you move them out to non custodial wallet like Trust wallet etc, the better it can be.

[jackpotmaster]

KuCoin exchange has actually suspended the withdrawal of funds from their customers who Recieved bitcoin together with this addresses

In as much as we all know this was a coincidence nobody’s problem it shows that self custody should be adhere to seriously when receiving bitcoin.

Most of us who used KuCoin and other exchanges to recieve payment need to take note that there are many risks involved because of some exchanges policy and it is best to use wallet and then probably move your bitcoin out from the wallet to exchange to sell. This is usually the best practice when Receiving bitcoin.

Such users are the problem, they are both using exchanges as their wallets and they always sell Bitcoin. They are not helping Bitcoin but are actually hurting it.

Many forum members has been campaigning of not store your bitcoin with exchange address but many of us continue to ignore such information, it seems that many information tender here some of us doesn't value such,

A lot of people write here things that they themselves don't do. They pretend to be experts on many things, but it is obvious that they are not.

[EluguHcman]

Most of us who used KuCoin and other exchanges to recieve payment need to take note that there are many risks involved because of some exchanges policy and it is best to use wallet and then probably move your bitcoin out from the wallet to exchange to sell. This is usually the best practice when Receiving bitcoin.

The kucoin exchange platforms services has not really been so efficient on the regular, they comes with one excuse to the other which had as well badly affect it users.

Talking about the incident of the Rainbet campaign participants and the exchange terms and conditions (specifically "Kucoin") is what  would had actually been avoided. Like @Mia Chloe has formally said, exchange is one of the prioritized section we discusses about here when considering securities and Privacies but it is weary to see participants (experience users) of same awareness being ignore of the same regular discussions we talks here.

Well the raise of this incident from OP should not be a savage but lessons that exchange especially the regulatory wallet providers can decide your finance and transaction activities for you which is one of the unique form that has considered Bitcoin as a decentlized currency to be far advanced to the fiats and it regulatory systems.

However,  the Hhampuz Rainbet campaign requires the bech32 BTC address which there are decentralized exchanges and self custodian wallet providers are also supported. So I don't think reasons why we should even use the regulatory networks with their randomly T&Cs adjustments to receive campaign payments on the weekly basis. Regardless of the  to receive the regular weekend payments  that randomly adjuster its T&Cs against users. Regardless of this suspension incident, atleast self custodial should be put to considerations to avoid the inconveniences.