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Author Topic: Scam Report Against CryptoXchange $100k USD  (Read 20261 times)
Matthew N. Wright
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June 08, 2012, 07:17:48 AM
 #121

Once AML flags go off, they can't legally send money to these scammer clowns even if they wanted to.

If that was the case, they shouldn't have sworn the money was on its way for weeks/months.
And "stolen bitcoins" alone wouldn't trigger an AML investigation on the bank side. Something more would be necessary.

Anyways, it's pointless to discuss this here.
The best option is trying to stay away from centralized exchanges, if possible.

I believe CXE has already sent them funds before and were unable to continue to do so because they were cockblocked by their own solicitors who demanded more information due to reported stolen accounts etc. Not to mention these scummyfucks are more than likely associated with the Linode hack. Who knows. These clowns are trying to pass off CXE's lack of response to the issue as some kind of denial, but they are legally bound to deal with the customer only and the customer continues to bring their slop to the forums instead of go through normal legal channels.

Kind of a no brainer who's lying here.

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June 08, 2012, 07:22:05 AM
 #122

Anyways, it's pointless to discuss this here.
The best option is trying to stay away from centralized exchanges, if possible.

I think most people agree that if you want even quasi-anonymity and zero risk of your funds being frozen, then AML compliant organisations cannot guarantee those things.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 08, 2012, 07:26:41 AM
 #123

It appears to me that the OP is just trying to get attention and with the help of sock puppet #239402 Liberty Payout, basically trying to smear the exchange to put pressure on it to cave. The problem with that is that we all know Ken is honest and that CryptoXChange has a flawless reputation.

I had that feeling from about page 1 or 2. Stuck out like a sore thumb to me. I would love CryptoXChange to be able to release the funds without fear of repercussions, but I doubt that will happen unless OP releases documents.

I doubt we will ever find out though, both parties have stopped posting.
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June 08, 2012, 07:57:03 AM
 #124

I don't think the people reading this thread actually know some of the nice things the legal system does.  I attended a neat compliance seminar some years ago where it was spelt out quite clearly that:  If you were under investigation or helping with an investigation, innocent or not, if you told anyone including your employer, another legal representative of the Government, or even your spouse that you were being investigated (or helping), you could be jailed.

One of the traps was not knowing if the discussion docs for possible policy were actionable (ie, they could prosecute you for breaching a guideline), or actual law/policy.

At the lower end of the scale, because the company I was with didn't file a correct FSL return, and I was commuting to/from Australia, I could have been arrested (personally) and jailed until the issue was sorted out - fortunately I could run my section remotely and it got sorted out. 
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June 08, 2012, 08:09:37 AM
 #125

I'd recommend people read the MtGox AML/KYC Process Explained thread.  It addresses some of the issues which people frequently ask about and the process is pretty standard in most FATF member countries (although countries may have domestic laws which go beyond the 40 + 9 recommendations).

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 08, 2012, 08:24:36 AM
 #126

I'd recommend people read the MtGox AML/KYC Process Explained thread.  It addresses some of the issues which people frequently ask about and the process is pretty standard in most FATF member countries (although countries may have domestic laws which go beyond the 40 + 9 recommendations).

+1

Indeed, those KYC procedures are unfortunately reasonable and exchanges have to play ball unless they want to be prosecuted.

OP, if you can show sources of funds and confirm your identity and explain any potential discrepancies (if any) with previously submitted documents, then I have a very good suggestion for you.

Stop bitching on forums, lawyer up and sue the begeesis our of whoever has wronged you. I can understand forum bitching over 1k$, over 100k$ not so much.

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June 08, 2012, 08:29:47 AM
 #127

I don't think the people reading this thread actually know some of the nice things the legal system does.  I attended a neat compliance seminar some years ago where it was spelt out quite clearly that:  If you were under investigation or helping with an investigation, innocent or not, if you told anyone including your employer, another legal representative of the Government, or even your spouse that you were being investigated (or helping), you could be jailed.

One of the traps was not knowing if the discussion docs for possible policy were actionable (ie, they could prosecute you for breaching a guideline), or actual law/policy.

At the lower end of the scale, because the company I was with didn't file a correct FSL return, and I was commuting to/from Australia, I could have been arrested (personally) and jailed until the issue was sorted out - fortunately I could run my section remotely and it got sorted out. 

If the thing that you say is true, then non-AU users should be afraid to use Australia-based exchanges. Simply not right jurisdiction for such international exchange. Maybe Panama, Brazil or Hong-Kong etc. could be way better.


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June 08, 2012, 08:51:27 AM
 #128

If the thing that you say is true, then non-AU users should be afraid to use Australia-based exchanges. Simply not right jurisdiction for such international exchange. Maybe Panama, Brazil or Hong-Kong etc. could be way better.

The problem with using offshore finance centres is that they're often on the blacklists of compliant countries and incoming transactions from them will be flagged.  They're fine if you're prepared to spend your offshore funds within the offshore jurisdiction, not so much if you want to be able to spend the money in the country where you reside.  Services located in offshore financial centres are often set up to cater to clients moving huge amounts of money via wire transfer, whereas Bitcoin users are often looking to minimise fees as much as possible.  And of course you have the risk of such businesses being opaque, as was the case with MyBitcoin.

The combination of losses from fraud, fraud prevention measures and AML/KYC/CTF compliance pose a significant financial challenge for exchanges and I suspect that few have any realistic idea of just how high that overhead will be when they start an exchange with a couple of people.  Not only will they always be targets for fraud and hacking attempts, they will become bigger targets the more successful they become and more money will need to be spent on protecting themselves from various threats to their viability.  Locating offshore does nothing to minimise the risk of fraud or security breaches, both of which can send an exchange broke just as surely as banks freezing their funds.

Quote
One of the traps was not knowing if the discussion docs for possible policy were actionable (ie, they could prosecute you for breaching a guideline), or actual law/policy.

Another fun thing is that AUSTRAC doesn't tell you specifically how you must assess risk and precisely what measures you must put in place but if you get it wrong you're open to being fined or prosecuted for non-compliance.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 08, 2012, 08:57:47 AM
 #129

I don't think the people reading this thread actually know some of the nice things the legal system does.  I attended a neat compliance seminar some years ago where it was spelt out quite clearly that:  If you were under investigation or helping with an investigation, innocent or not, if you told anyone including your employer, another legal representative of the Government, or even your spouse that you were being investigated (or helping), you could be jailed.

One of the traps was not knowing if the discussion docs for possible policy were actionable (ie, they could prosecute you for breaching a guideline), or actual law/policy.

At the lower end of the scale, because the company I was with didn't file a correct FSL return, and I was commuting to/from Australia, I could have been arrested (personally) and jailed until the issue was sorted out - fortunately I could run my section remotely and it got sorted out. 

If the thing that you say is true, then non-AU users should be afraid to use Australia-based exchanges. Simply not right jurisdiction for such international exchange. Maybe Panama, Brazil or Hong-Kong etc. could be way better.




The government here is fucked up beyond repair and treats us like the convicts that first came here on boats. I dont blame anyone for avoiding it.

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June 08, 2012, 09:41:32 AM
 #130

Maybe Panama, Brazil or Hong-Kong etc. could be way better.

Definitely not Brazil!
Brazil might a good place to hide yourself if you're wanted by the police abroad (particularly if you're a leftist terrorist wanted for multiple murders), and even of that I wouldn't be 100% sure - if someone in the government sees an advantage for himself in turning you over, and there's nobody who would have an advantage in protecting you, then you'll likely be extradited.

Brazil is definitely not the place to hide your hard-earned money from predators, that's for sure. It's a tax hell, not a tax haven.
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June 08, 2012, 02:49:44 PM
 #131

It seems like this is a battle between two exchanges: http://wmirk.ru.

~Bruno~
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June 08, 2012, 07:26:56 PM
 #132

Boy am I glad I don't trust ANY of these exchanges. There's plenty of red flags associated (IMO) with CryptoXchange, especially on the money laundering front (not to say they are, but I do suspect it's a very distinct possibility, and I won't tie my money up with them for fear that THEY will have THEIR funds seized, and that would include mine - how many other exchanges were trying to partner with casinos? - yeah I smelled a scam long ago)

OP - sorry to hear your story. Attorneys are in order - hire one and get your money out of harm's way.

IMO, if this customer had 100K there, how likely is it that the exchange actually has the funds to pay? I'm more than a little suspicious of ALL exchanges running fractional reserves, and being unable to meet their withdrawal demands.

This seems more than a little suspicious. Probably the most suspicious is that CXE is "the ethical exchange"
FFS, if you have to use it as a tag line, what are the odds it's actually true?

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June 08, 2012, 08:23:27 PM
 #133

I'm more than a little suspicious of ALL exchanges running fractional reserves, and being unable to meet their withdrawal demands.

+1

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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June 08, 2012, 09:07:16 PM
 #134

IMO, if this customer had 100K there, how likely is it that the exchange actually has the funds to pay?

Well since the 20k+ of BTC is claimed to have been transferred into it I would say good chance they have the cash in one form or another ie. either still have those coins they can sell to get it or the cash from the sale of them is just sitting there still.

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June 08, 2012, 10:43:33 PM
 #135

Yesterday exchanged for test 83 BTC with Cryptox, then transferred CryptoXChange code to AurumXChange, and then got  payment to Liberty Reserve successfully. This is not $100k though. For such amount I would transact only if I knew personally owners, otherwise I would go with small transactions to lower risks.

So I would like to say that at least AurumXChange trusts CryptoX codes, and probably there are good amounts flowing there. And AurumXChange as well maintain enough reserves to grant immediate payout using liberty reserve. This means there trust exists between Aurum and CryptoX.

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June 08, 2012, 11:03:11 PM
 #136

Can we coin a term "Dwollad" for things like this? Funny how this and the Dwolla vs Tradehill situation occurred in the ~$100K range.
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June 10, 2012, 11:36:24 PM
 #137

Maybe Panama, Brazil or Hong-Kong etc. could be way better.

Definitely not Brazil!
Brazil might a good place to hide yourself if you're wanted by the police abroad (particularly if you're a leftist terrorist wanted for multiple murders), and even of that I wouldn't be 100% sure - if someone in the government sees an advantage for himself in turning you over, and there's nobody who would have an advantage in protecting you, then you'll likely be extradited.

Brazil is definitely not the place to hide your hard-earned money from predators, that's for sure. It's a tax hell, not a tax haven.

Malta is nice,  they make good offer for poker players from USA to establish residency there

this thread:

мозг взрывается

Dacentec, best deals for US dedicated servers. They regularly restock $20-$25 Opterons with 8-16GB RAM & 2x1-2TB HDD's (ofc, usually lots of other good stuff to choose from).  I did a Serverbear benchmark of one of my $20/mo Opteron (June last year), it's here.  Have had about a half dozen different servers with Dacentec, & none have failed to sustain at least 40MB/s (burst higher). My favorite is a 12-month rent-to-own ZT Systems 2XL5520 16GB 2x2TB SATA for $40/month (got lucky with the 'off-brand', haven't seen a RTO 2xL5520 for under $50/mo since -- at least for monthly contracts).  wholesaleinternet.com has some ancient 2-core intel CPUs @ $10/mo sometimes (I got an Intel Core 2 6300 @ 1.86GHz, with a 250GB HDD with 46000 hours on it, LOL. $20 @ Dacentec is much better, if you can grab one). joesdatacenter.com (same location as Wholesale Internet) also occasionally has specials (or if you don't want to wait, it has an AMD Opteron 170 @ $16/mo).
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June 11, 2012, 10:47:11 PM
 #138

I'm more than a little suspicious of ALL exchanges running fractional reserves, and being unable to meet their withdrawal demands.

+1



I think they're all broke it's always something.. Angry
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June 11, 2012, 10:53:44 PM
 #139

subscribing for entertainment

but seriously I hope this gets resolved well
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June 12, 2012, 12:36:40 AM
 #140

The problem with that is that we all know Ken is honest and that CryptoXChange has a flawless reputation.

I wouldn't say they have a flawless reputation.  We don't all know that.  

I've heard rumors that they had major litecoin solvency issues which they swept quietly under the rug, and that is why you can't trade litecoin anymore.

Another rumor I heard was that their registrations and compliance are overstated and that they don't have any financial service business registrations and they are effectively registered as a software company.

I don't know if either of those are true, could have just been trolls.  Heard from anonymous internet strangers, so take that as you will.

Doesn't matter to me though, I've never liked their business style (excessive ads, "24-hour support" that isn't always available, gold coin pricing errors, etc.) . This thread just seals the deal.

I think this may be the end of CXC
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