Popular UK exchange TradeSatoshi unexpectedly announced it would be closed this week
TradeSatoshi active exchange 2015 has announced this week that it will be closed. And the important thing is that the users all said they couldn’t get the money back.
TradeSatoshi unexpectedly closed amid much suspicion
UK-based cryptocurrency exchange, TradeSatoshi, tweeted that they would stop trading at 10:07 yesterday morning. This is a viral exchange because of its location in the UK and because it has many different altcoin trading pairs.
Tradesatoshi is closing down.
Read the announcement for details.https://t.co/GjSwwllxhT
Please make sure all withdrawals are completed before March 1 2020 00:00 UTC.
Please do not deposit! Deposits will no longer be processed. pic.twitter.com/4xxt2ZOa9P
— Trade Satoshi (@TradeSatoshi) February 20, 2020
Notice of the exchange appeared a lot of strange situations around it. The advice includes a link to the TradeSatoshi page, which repeats the announcement that they are no longer taking deposits, and traders must withdraw their funds before March 1, 2020, 00:00 UTC. The withdrawal period seems very suspicious as it allows the platform’s customers less than ten days to get their money back. On top of that, customers have reported unexpected AML/KYC requests for additional users that have been approved by the platform.
I have account whose withdrawal options are not highlighted. Your support said that I need to update kyc but I had already completed my kyc and it has been approved by your side too. Kindly let me withdraw my coins. Please provide solutions.
— Bebaak_balwinder (@BalwinderBebaak) February 20, 2020
Other customers reported that the AML/KYC process took two months to complete, so they could not pass by the specified deadline. However, some people have said that they cannot withdraw money even after meeting additional AML/KYC requirements.
How can we do withdrawal when your system is not allowing us pic.twitter.com/0B5CfVYImW
— Thembisani Maphalala (@Maphalala_T) February 20, 2020
The unexpected AML/KYC demand seems to be a growing pattern when exchanges are having financial trouble. Under current AML/KYC laws, they can say that your transactions are suspicious and may freeze money. With fly-by-night crypto exchanges, this kind of compliance is used as a tool to attract customers of the platform once the transaction becomes insolvent, due to hacking or mismanagement.
TradeSatoshi remained silent in the face of discontent from the user
TradeSatoshi has not yet responded to its customers expressing concerns about the difficulties of withdrawing funds from the platform. On top of that, the platform has also been edited, which can see tweets in their thread.
3/3 Proof of reserves should become the standard for custodial Bitcoin institutions, bringing strong assurances of solvency to their clients.
Ideally, building on @CaitlinLong_’s work, custodial providers ought to offer legal bailment instead to mitigate counterparty risk.
— Thibaud Marechal ? (@thibm_) February 11, 2020
While unrelated, these stories remind us of the difficulties faced by recent Chinese traders, who are having similar drawbacks to the Korean exchange Upbit.
Many cryptocurrency users have called for exchanges to provide proof of cryptocurrencies, crypto reserves to ensure that money can be tested and kept safe in offline cold storage, which any user of the platform can verify themselves.
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