OKx ban for bad AML crypto

[examplens]

Therefore, unless these platforms offer address AML verification before depositing, all these steps are useless.

That's what I was thinking of actually. Is it against the law for them to offer such a thing? I doubt it?

Is the blocking of funds always in accordance with the law because an AML analysis identified a certain risk? And how to fight against it?
Here is the case against Tether, which froze $ 42 million in USDT based on an informal verification request. The lawsuit claims that there was no court order, subpoena, or prior notice when the freeze happened.

This is true but what about those that have not heard about AML checkers before?

Sometimes there has to be a first time, right? 

[bitmover]

I guess the best is to check the aml score  of all coins before sending to any CEX.
I do that,  there are many free aml checkers

if the AML score is high, just chose another UTXO or use a good mixer to get cleaner coins

The main problem with defining "high risk" is that AML scores can vary from platform to platform, and what is classified as low risk on one platform might be medium or high risk on another.

Therefore, unless these platforms offer address AML verification before depositing, all these steps are useless.

I wouldnt say useless. You can make 2-3 checks in differente ones for free. If an address appear as risk in any of them, just use another one on srrvices which you dont trust

I had voins from eXch and SB in the past, for example, and they were all tagged as high AML in all services I checked.

Edit: I agree you might still have problems but that is a way to reduce the risk

[OmegaStarScream]

Is the blocking of funds always in accordance with the law because an AML analysis identified a certain risk? And how to fight against it?

AFAIK, legally, they MUST block any suspicious transaction and then ask you for more details (transactions history, proof of wealth, etc.) otherwise they would potentially face something like this[1].

[1] https://www.justice.gov/usao-sdny/pr/kucoin-pleads-guilty-unlicensed-money-transmission-charge-and-agrees-pay-penalties

The problem though, is that there is no way to confirm whether the claim of the exchange is true or not. AFAIK, telling the user what's wrong could be considered as "tipping them off" which is illegal for the exchanges to do. Whether that's the case on EVERY suspicious transaction, or just specific cases, that I'm not sure of.

[salad daging]

You can make sure you do not send the coins directly to them, but first send it to an address on your noncustodial wallet and send it to another address before sending it to the exchange.

That might help but not always. If you have funds coming from a mixer, or a non regulated/sanctioned gambling or exchange for example and on a regular basis, you can probably go through 3-4 addresses before sending them to the exchange and they would still block the deposit and freeze the account until you provide what they ask for.

I have experienced this incident when funds were detained by Binance because the address was marked, because I received payment from the mixer campaign to my personal wallet and then sent it to the exchange, it was still detected.
Well now there is an AML address score included in this forum to see the extent of the risk of our address, whether it can help clear it or not? The Bot is AML_Bot.

[Lida93]

I have experienced this incident when funds were detained by Binance because the address was marked, because I received payment from the mixer campaign to my personal wallet and then sent it to the exchange, it was still detected.
Well now there is an AML address score included in this forum to see the extent of the risk of our address, whether it can help clear it or not? The Bot is AML_Bot.

I had persons who faced similar issues with Binance back then due to a reception of funds from a mixer to their Binance wallet address. The frustrating part about it is that the exchange keeps requesting for more details after another and the individual could even get  tired with certain questions and requirements they' be asking to provide especially when it's an insignificant amount of funds that's not really worth revealing so much of your privacy for.
Only a person whom have had the experience would know the very importance of using the AML score checker bot for certain coins they want to send to an exchange wallet if they ain't comfortable with the source.

[ultrloa]

Is the blocking of funds always in accordance with the law because an AML analysis identified a certain risk? And how to fight against it?

AFAIK, legally, they MUST block any suspicious transaction and then ask you for more details (transactions history, proof of wealth, etc.) otherwise they would potentially face something like this[1].

[1] https://www.justice.gov/usao-sdny/pr/kucoin-pleads-guilty-unlicensed-money-transmission-charge-and-agrees-pay-penalties

The problem though, is that there is no way to confirm whether the claim of the exchange is true or not. AFAIK, telling the user what's wrong could be considered as "tipping them off" which is illegal for the exchanges to do. Whether that's the case on EVERY suspicious transaction, or just specific cases, that I'm not sure of.

Blocking the transaction or funds is I think the first thing they can do, if they found something suspicious on the transaction happened. Also I think this is how they can avoid experiencing the cases what Kucoin coin get and avoid being penalized for that illegal money transmission.

But on other side, they cannot always tell the exact reason on why they made such actions, since it might just give a tip for those frauds or bad actors what to do to avoid detection. I also think that this is been forbidden by AML laws.

That's why sometimes I understand people telling that, it seems they are been left in the dark even if the exchange are just trying to be compliant with the law.

[logfiles]

How would you even know if your Bitcoin is dirty? An average user wouldn't know, and if they're doing p2p transactions, they might run into something like this.

We need a clear definition of what a dirty bitcoin is because it would help some users. Dirty? Tainted? Or something. I hope it would be clarified or something.

"Dirty" or "tainted" BTC is a term that those so called regulated platforms came up with to give them the right to block/freeze your funds that are deposited in their exchanges. If it so happens that your source of funds is undocumented. They will usually label it as dirty or if it happens to originate from mixers, gambling sites, sanctioned exchanges, dark web marketplaces, etc.

[Peanutswar]

Most of the centralized exchange actually, this is the reason why if you wanted to receive a coin dont use a CEX address directly for the deposit of the account there is a chance that the source has a tag or a red flag such as a high risk when it comes for the reputation of the wallet, do always use a wallet to receive the funds or else try to use DEX to swap into other token or find some way to make it clean or else your deposited funds will be freeze like what the OKX did on your OP. Now after that for sure that's the time they will seek a KYC for you and seek an investigation where it came from and the resources of the money so at least you able to withdraw your funds. If they allowed.

[hugeblack]

That's what I was thinking of actually. Is it against the law for them to offer such a thing? I doubt it?

They will not do that because they can now simply freeze any transaction on the grounds that it is "high risk" and here the depositing party must do everything to prove that their money is clean "origin of funds, more data, IP addresses, etc."

AFAIK, legally, they MUST block any suspicious transaction and then ask you for more details (transactions history, proof of wealth, etc.) otherwise they would potentially face something like this[1].

True, but AML's initial verification process will reduce their control over deposits; these platforms are not trying to comply with regulatory restrictions as much as they want more control.

[FinneysTrueVision]

The head of the OKex exchange warned in his X that the exchange may block a user for dirty crypto:

What’s interesting about this is that he was quote tweeting a user who is saying that they deposited crypto directly from a gambling platform. They do not mention a specific casino, so it is unclear if OKX is flagging deposits from any casino or from a specific one. There were some rumors that funds coming from Duel.com were being marked as high risk. From now on, gamblers that rely on OKX should either look for a different exchange or withdraw to their own self-custodial wallet before transferring to OKX.

[joniboini]

From now on, gamblers that rely on OKX should either look for a different exchange or withdraw to their own self-custodial wallet before transferring to OKX.

I can't remember how many times I've heard that withdrawing to your own wallet first will allow you to "bypass" being labelled as high risk deposit. In my mind it's pretty "easy" to see where the previous txs where unless you're using something to conceal your trail (coinjoin, etc). Does those AML checker really find it hard to trace them back or do they require exchanges or anyone using them to pay more?

[logfiles]

What’s interesting about this is that he was quote tweeting a user who is saying that they deposited crypto directly from a gambling platform. They do not mention a specific casino, so it is unclear if OKX is flagging deposits from any casino or from a specific one. There were some rumors that funds coming from Duel.com were being marked as high risk. From now on, gamblers that rely on OKX should either look for a different exchange or withdraw to their own self-custodial wallet before transferring to OKX.

Almost all major crypto exchanges that I know do not allow funds from gambling platforms if you read their terms of service. It's just that they have not been so strict about it yet. I think it's only Bybit that did not have that clause in their ToS the last time I checked

I can't remember how many times I've heard that withdrawing to your own wallet first will allow you to "bypass" being labelled as high risk deposit. In my mind it's pretty "easy" to see where the previous txs where unless you're using something to conceal your trail (coinjoin, etc). Does those AML checker really find it hard to trace them back or do they require exchanges or anyone using them to pay more?

I think they (exchanges) are being so lenient so far but AML checker trace so much more than just a few addresses or previous TXs.