Swapping on smaller instant exchanges — what should I check first?

[Localhostspeed]

All exchanges that froze your finds are a red flag and I'd avoid them. If you can and want to trade I'd suggest going through a reputable exchange that does KYC. If you want to stay completely anonymous then I'd suggest try to find Bitcoin ATMs either in your country or another that supports them, and send the Bitcoin to the exchange, trade it for your cryptocurrency of your choice, and then back to your wallet.

Most exchanges that are kyc can seize your funds, even if you do kyc with them, they are going to freeze your accounts and your kyc is what they are going to use to further do an investigation if they are suspicious of your deposit. I don't know what you are telling him to go and use centralized exchanges when they are the causes of why funds are AML compliance, they can seize your funds if they see anything that is suspicious unless you are buying fiat from your bank transactions.

Some instant exchanges don't ask for kyc but they can ask you for information to clear yourself before you can be able to access that money. The ATM you also suggested have terrible fees, except if in his country theynhave good services. My best advice is decentralized p2p, they have good buyers, even though the fee rate to local currency might be higher, but you have nothing to worry about coin freeze by anyone.

[Johnlomape]

Hi everyone. New account, been reading for a while. I want to try one of the smaller no-KYC swap platforms for a Monero swap, but I keep finding horror threads about funds sitting "frozen by the liquidity provider" for months. Is that just how this industry works, or is it a red flag for specific platforms? What would you check before sending anything non-trivial through an instant exchange? I'd rather learn from people who've been through it than find out the expensive way. Any advice welcome.

Asking this kind of question is good so that you can understand how the swapping system works so you don't end up using the wrong exchange that will freeze your token making it hard to recover it. There are so many No-KYC exchanges you can use and you are not going to have any issue with your fund. In most cases, if you' transaction is suspicious the exchange can return it back to you instead of locking fund that does not belong to them. You will have to choose good exchange not the bad ones that can do anything to hold your fund.

[AVE5]

Hi everyone. New account, been reading for a while. I want to try one of the smaller no-KYC swap platforms for a Monero swap, but I keep finding horror threads about funds sitting "frozen by the liquidity provider" for months. Is that just how this industry works, or is it a red flag for specific platforms?

Note that despites the platform being unregulated and relatively processes its transactions protocols through the decentralized network blockchain since it also holds stable coins.
With how scammers had diversified in schemes, there's need to be very careful so that we don't fall victims over them that tends to disguise itself and not being entirely transparent with their terms.
So there's every need to consider using licensed platform because there you can build trust with also need to check on their reviews to know their visions and as well rates their reputation.

[boyptc]

In most cases, if you' transaction is suspicious the exchange can return it back to you instead of locking fund that does not belong to them. You will have to choose good exchange not the bad ones that can do anything to hold your fund.

They can block the transaction and don't try it again if that happens. And they only usually do that if they find something suspicious within the source of the fund and traced it through the sender.

I haven't encountered any problem with that but this can also happen in the bigger exchanges that OP if ever he's still interested with, needs to know.

If you want to stay completely anonymous then I'd suggest try to find Bitcoin ATMs either in your country or another that supports them, and send the Bitcoin to the exchange, trade it for your cryptocurrency of your choice, and then back to your wallet.

But be ready for the higher fees if transaction will be through that.

[noorman0]

If you want to stay completely anonymous then I'd suggest try to find Bitcoin ATMs either in your country or another that supports them, and send the Bitcoin to the exchange, trade it for your cryptocurrency of your choice, and then back to your wallet.

Bitcoin ATMs don't guarantee anonymity; in fact, I recall that some machine models require your phone number, and the booths are equipped with CCTV. And obviously, people nearby can see your physical actions.

Besides, the OP's question isn't just about Bitcoin specifically.

[ultrloa]

If you want to stay completely anonymous then I'd suggest try to find Bitcoin ATMs either in your country or another that supports them, and send the Bitcoin to the exchange, trade it for your cryptocurrency of your choice, and then back to your wallet.

Bitcoin ATMs don't guarantee anonymity; in fact, I recall that some machine models require your phone number, and the booths are equipped with CCTV. And obviously, people nearby can see your physical actions.

Besides, the OP's question isn't just about Bitcoin specifically.

Maybe they are confused about this matter, but actually that machine require KYC. They could able to read it here the real situation about that thing https://cointimeatm.com/are-bitcoin-atms-safe-and-private

So if they want their identity to be safe from possible tracking don't go with these option. Also I don't think going on small instant exchange is best choice here. Because maybe they might get a reputation and liquidity issue.

Much better to go on well establish instant swap exchange, which does not require KYC.

[Josefjix]

It's the first time I'm hearing this complaint about coin sitting for long time because of low liquidity. This happens because the platform integrates with API using low liquidity providing exchange. I don't want to recommend any no kyc exchange but if you must use one, there are handful of them on the signature of users on the forum.

Be sure to use the best one and to use the refund address if transaction doesn't go successful.

[noxswap]

I keep finding horror threads about funds sitting "frozen by the liquidity provider" for months.

Disclosure first: I run NoxSwap, one of those small no-KYC swaps, so weigh this accordingly. But here's what's usually behind those "frozen" stories, from the inside.

Most small swaps don't hold their own liquidity. They route your coins to a bigger exchange that does, and that exchange screens every deposit. If the coins trace back to a hack, a scam or a sanctioned service, the swap gets held for review. That's where the months-long horror stories come from.

So the things worth checking before you send anything real:
- What happens if your swap gets flagged and you refuse KYC? A decent service refunds you without KYC, minus the network fee. If the terms don't say that clearly, ask support before sending, not after.
- Is there a refund address field? Fill it in.
- Look for recent, specific complaints, not old or vague ones. Scam Accusations, BitList and OrangeFren are good places to check.
- Do a small test swap first.

For a normal swap from your own wallet, flags are rare. The real horror stories are usually flagged funds plus a service that won't let go of them without documents.

[Mpamaegbu]

...but I keep finding horror threads about funds sitting "frozen by the liquidity provider" for months.

There you've the answer to your question. That's a huge red flag to start with, already spelt out. I don't take reviews for granted, especially the critical ones. Those are the ones I pay attention to. Everyone can't be hating on a product if it's good.

Is that just how this industry works...

You've to remember that in every 12, there's a Judas. Nowhere in business is completely free from scam activities. And to answer your question, no; that's not how this industry works but we can factor in the presence of bad actors. Those who are ready to take your money once you snooze.

What would you check before sending anything non-trivial through an instant exchange? I'd rather learn from people who've been through it than find out the expensive way. Any advice welcome.

First, I check the trust score/rating of the site. Then I read reviews on it. The review part is mandatory for me. I want to know how those who've used their services were treated, their customer care. Even when a site is not a scam but has a shitty customer care, I avoid it. The knowledge of where and what type of regulation the site is governed by is also part of the adventure. Those are what I look out for.

[JeromeTash]

-snip-

Some will even go as far as lying about the refunds, but when the freezing happens by the third-party liquidity providers, that is when reality hits the customer. I think the most important thing is to just rely on services that have their own reserves, and these reserves have to be independently proven

As the service builds trust over time, more and more users gain confidence in using it.

[noxswap]

Fair point, and the freeze is exactly where the gap between marketing and reality shows. I'd add one thing: own reserves help, but on their own they don't remove that risk, because a service with its own liquidity can still hold a deposit under its own rules. What protects the customer either way is a written refund rule that the service actually follows, plus a history you can check over time.

[TastyChillySauce00]

but I keep finding horror threads about funds sitting "frozen by the liquidity provider" for months. Is that just how this industry works

This isn't how the industry works, supposedly. The problem is Monero have mandatory privacy which causes matching problem for a true non custodial dex to manage it the non custodial way, so you got swap services that temporarily keep your money or even have privileges to freeze your funds as "liquidity provider" if I'm not mistaken.

This is just how it is, swap between L1 coin that have totally different underlying design always take a lot of work to do and the easiest way is to simply build a custodial swap that you control. I think even Thorchain excluded Monero for this exact reason, difficulty tracking balance, however recently they announced Thorchain 3.20 that'll allow XMR and Zcash swap from bitcoin or altcoins in general.

[Stable090]

It's always better to see the user reviews of any site you want to swap your coins on.
If you do find any bad reviews, then skip that site because you won't want your funds getting stuck in those exchanges.
Better opt for sites which are reputed and have good user feedback. Better be safe than sorry.

When making use of an exchange, or any platform, you should make use of the review about the site to determine if the site is good to use or not. Have seen people being paid to make positive reviews about a site, the site might not really be a good one, but people are going to make positive reviews, and anyone that checks the review will think the site is a reputable one. Some people don’t think about people that they are going to endanger just because of their actions, they are going to be paid little amount just for the review, and they going to endanger lots of people.

If anyone is making use of any site, they should take their time to do more investigation, don’t just make use of review you see on site to conclude if it’s a good site. Instead of making use of sites with lower reputation, it’s better to make use of a reputable exchange.

[pawanjain]

It's always better to see the user reviews of any site you want to swap your coins on.
If you do find any bad reviews, then skip that site because you won't want your funds getting stuck in those exchanges.
Better opt for sites which are reputed and have good user feedback. Better be safe than sorry.

When making use of an exchange, or any platform, you should make use of the review about the site to determine if the site is good to use or not. Have seen people being paid to make positive reviews about a site, the site might not really be a good one, but people are going to make positive reviews, and anyone that checks the review will think the site is a reputable one. Some people don’t think about people that they are going to endanger just because of their actions, they are going to be paid little amount just for the review, and they going to endanger lots of people.

If anyone is making use of any site, they should take their time to do more investigation, don’t just make use of review you see on site to conclude if it’s a good site. Instead of making use of sites with lower reputation, it’s better to make use of a reputable exchange.

That is also true. There are sites that run a PR campaign and pay the people to make positive/negative reviews as they like.
It becomes difficult for us to identify which reviews are paid and which ones are genuine but by putting in a little effort, we can differentiate them.
Also, there are certain review sites that are reputable and so we can make use of those sites to find genuine user reviews as well.
At the end, we have to do our research well before depositing any money on any site to prevent any mishaps.

[Callido]

Asking this kind of question is good so that you can understand how the swapping system works so you don't end up using the wrong exchange that will freeze your token making it hard to recover it. There are so many No-KYC exchanges you can use and you are not going to have any issue with your fund. In most cases, if you' transaction is suspicious the exchange can return it back to you instead of locking fund that does not belong to them. You will have to choose good exchange not the bad ones that can do anything to hold your fund.

He has seen the signs, why not leave for another exchange? He can go on if he wants to test and find out, most complaint threads and reviews are created to warn future users about what is going on in the exchange. After seeing the threads, i expect OP to have a change of mind, especially when the complaints are unresolved, and judgment seem biased to favor the owners.

[M47AK16]

When making use of an exchange, or any platform, you should make use of the review about the site to determine if the site is good to use or not. Have seen people being paid to make positive reviews about a site, the site might not really be a good one, but people are going to make positive reviews, and anyone that checks the review will think the site is a reputable one. Some people don’t think about people that they are going to endanger just because of their actions, they are going to be paid little amount just for the review, and they going to endanger lots of people.

If anyone is making use of any site, they should take their time to do more investigation, don’t just make use of review you see on site to conclude if it’s a good site. Instead of making use of sites with lower reputation, it’s better to make use of a reputable exchange.

That is also true. There are sites that run a PR campaign and pay the people to make positive/negative reviews as they like.
It becomes difficult for us to identify which reviews are paid and which ones are genuine but by putting in a little effort, we can differentiate them.
Also, there are certain review sites that are reputable and so we can make use of those sites to find genuine user reviews as well.
At the end, we have to do our research well before depositing any money on any site to prevent any mishaps.

Even those reputed platforms where you feel the review is genuine might be falsified. Anything in this world can be purchased for money. If you can spend thousands of dollars on a single review, why would they not fall for it. Even exchanges rated high on these platforms have shut down so it does not allow me to trust even those platforms giving ratings to exchanges. Exchanges mostly spend a big chunk of money on marketing and PR so they can purchase a number of such reviews with their high budgets.

We have to spend hours in research but yet we are not always positive that the exchange will work for a long time. We never know what might happen in future due to the uncertainties. The only best practice I follow is not to trust any of these exchanges and hold funds only in a wallet which I have full control on.

[Johnlomape]

In most cases, if you' transaction is suspicious the exchange can return it back to you instead of locking fund that does not belong to them. You will have to choose good exchange not the bad ones that can do anything to hold your fund.

They can block the transaction and don't try it again if that happens. And they only usually do that if they find something suspicious within the source of the fund and traced it through the sender.

I haven't encountered any problem with that but this can also happen in the bigger exchanges that OP if ever he's still interested with, needs to know.

It all depends on the instant exchange and what liquidity provider they afford using at the moment.
If they have a less strict liquidity provider for all their swaps, the funds can be returned and it would have been flagged by their AML bot that is scoring each transaction before it's completely initiated. I will urge anyone that want to use any of the no kyc exchanges to first check their terms before use so they can understand the terms for swapping any coin and what will happen if the transaction is suspicious and frozen. We don't have to joke with this aspect before initiating any transaction on a new no Kyc exchange.