How to resolve gambling related wallet issues

[Saint-loup]

Creating this thread for us to discuss what ways to resolve wallet blacklist on exchange because of gambling related issues.


What motivate me to start this thread is a recent event with a popular exchange which freezes a customer account because of funds received from gambling site as rewards, so in this kind of situation where a wallet got blacklisted what are the ways to go about redressing and to redeem the situation legally.

Unfortunately I don't think there's much recourse for the customer. If funds deposited are locked by the exchange, he will need to complete a KYC procedure, if not he will need to mix his funds or to convert them into another cryptocurrency on another exchange before sending them to this exchange again, and from another address of course if he wants to bypass the blacklisting imposed on this address. Exchanges can't monitor all the adresses of a same wallet, they can only spot linked addresses to blacklisted addresses.

[coolcoinz]

a popular exchange which freezes a customer account because of funds received from gambling site as rewards

If I knew an exchange is doing that I would remove all my money and ask them to disable may account. I'd stop being their customer because that goes completely against the values bitcoin was built on.

If your money was frozen, I'd get a lawyer. They have right to refuse to process your transaction, can demand KYC, but cannot steal your money. You're not guilty of anything and should be given your property back. Otherwise it's theft and you can sue them. Get a lawyer to write them a letter asking to return your money.

[ralle14]

One of the local exchanges I used back then also doesn't allow gambling transactions, if they catch you sending coins directly through their wallets, they'll suddenly limit your account and require extra KYC before they let you withdraw the remaining balance you have on their wallet. After that bad experience, I always assumed that most exchanges are that strict with how they handle the coins coming from casinos. You'd be lucky if you could find another option since exchanges rarely care about how they settle these kinds of issues.

[_act_]

Unfortunately I don't think there's much recourse for the customer. If funds deposited are locked by the exchange, he will need to complete a KYC procedure, if not he will need to mix his funds or to convert them into another cryptocurrency on another exchange before sending them to this exchange again, and from another address of course.

I do not really understand you. You mean that the coin might be seized or locked in which the customer of the exchange that his fund was locked because he deposited from a gambling site will need to complete a KYC verification. That might be true but I do  not know. What I am confused about is that you further said 'if not', which means if the coin is not seized. If the coin is not seized, how can the person know that he need not to send coins from gambling site when he does not know. Or what you mean is that to avoid the coin not to be sized? It is better for the person to send the coin to a noncustodial wallet instead and not an exchange, especially if it is bitcoin because bitcoin transaction fee is high on exchanges than usual and this exchanges like Coinbase make the gambling rules hidden in their ToS. You do not need to convert the coin to another coin. People have said they send the coin to noncustodial wallet before sending to the exchange and no problem after they send it to the exchange.

[delfastTions]

a popular exchange which freezes a customer account because of funds received from gambling site as rewards

If I knew an exchange is doing that I would remove all my money and ask them to disable may account. I'd stop being their customer because that goes completely against the values bitcoin was built on.

If your money was frozen, I'd get a lawyer. They have right to refuse to process your transaction, can demand KYC, but cannot steal your money. You're not guilty of anything and should be given your property back. Otherwise it's theft and you can sue them. Get a lawyer to write them a letter asking to return your money.

This is certainly the right direction to resolve this issue.  However, this is a rather expensive solution since the lawyer will probably require a fee.  In addition, this is a rather lengthy procedure, since official correspondence with official responses about the exchange is required.  And here the question arises, starting with at least approximately what amount of frozen funds is it even worth doing this.  It’s clear that if it’s $100, then it doesn’t make sense to bother.  In all of this, of course, there is a problem that the player can only solve himself. 
And besides, in any case, you will still have to verify your exact personal data, which is unacceptable for many players.

[erep]

One of the local exchanges I used back then also doesn't allow gambling transactions, if they catch you sending coins directly through their wallets, they'll suddenly limit your account and require extra KYC before they let you withdraw the remaining balance you have on their wallet. After that bad experience, I always assumed that most exchanges are that strict with how they handle the coins coming from casinos. You'd be lucky if you could find another option since exchanges rarely care about how they settle these kinds of issues.

Maybe we should have an alternative wallet as a bridge to transfer balances to an exchange wallet, I don't guarantee that this recommendation is safe, but we have never been connected directly to a wallet that accepts coins from the casino. I think it is better to review some of the top exchanges to find one that does not prohibit casino related deposits. However, never withdraw directly from the casino to an exchange account, but use a personal wallet for withdrawals and you can send to the exchange to transfer to USDT, or you can use a trusted P2P service to withdraw the balance to your account.

[blockman]

One mistake is don't do it. The exchange will force you with everything that you haven't complied yet and if you don't do it then your funds will left on them. And if you don't adhere to their compliance, it's up to you if you can take that your funds will be left there forever and they'd give you a window period on how long you have to comply with it. I've done that mistake before and the exchange that we have locally have warned me about it and they're very strict with it. Well, I stopped trading on them and that's not a loss for me but for them as they lose a customer.

[Ultegra134]

To be honest, this is the first time I've read about such an issue. A few users mentioned Coinbase and Binance, and via a quick skimming I did on Coinbase's TOS, I found the following:

"Unlawful Gambling: Lotteries; bidding fee auctions; sports forecasting or odds making; fantasy sports leagues with cash prizes; internet gaming; contests; sweepstakes; or games of chance that are not sanctioned by a governmental body or regulatory authority."

So, from my understanding, they're prohibiting any transactions with gambling sites that aren't regulated by law, and I'm guessing that cryptocurrency casinos, even though they do have a license, aren't regulated by the government, right? I have zero knowledge on the subject thus correct me if I'm wrong, it's merely a guess of mine.

[bettercrypto]

The only exchange that I knew that was doing that is Coinbase. There may be more exchanges that do that but I do not know them. I have used over 10 exchanges and non of them are against gambling.

What I can say is that you should read the ToS of every gambling site you want to open an account with. If the gambling site will not receive coins from gambling sites, it would be stated on the exchange ToS.

Is Coinbase still doing that?

What I really know is that until now, Coinbase is still doing that to their users who use the gambling platform and then send it to the platform. Then suddenly, there will be a problem right there with the person who has an account on the platform.

That's the problem sometimes, so it's better to make a withdrawal transaction from a gambling platform; it's good to send to non-custodial wallets like Trust wallet and Klvr apps wallet, at least nothing like what other exchanges do.

[avp2306]

To be honest, this is the first time I've read about such an issue. A few users mentioned Coinbase and Binance, and via a quick skimming I did on Coinbase's TOS, I found the following:

"Unlawful Gambling: Lotteries; bidding fee auctions; sports forecasting or odds making; fantasy sports leagues with cash prizes; internet gaming; contests; sweepstakes; or games of chance that are not sanctioned by a governmental body or regulatory authority."

So, from my understanding, they're prohibiting any transactions with gambling sites that aren't regulated by law, and I'm guessing that cryptocurrency casinos, even though they do have a license, aren't regulated by the government, right? I have zero knowledge on the subject thus correct me if I'm wrong, it's merely a guess of mine.

Encountered what OP has been experienced. Also I don't think its about regulated or not since If I'm not wrong there are series of blacklisting of wallets happen before even if the casino is regulated. That's why if we know that our funds came from casino we better redirect it to exchange first before we send it to our local wallet providers or in coinbase. Since there are certain regulations or rules that prohibit them to have a transaction came from gambling sites that's why other people like OP got blacklisted from that wallet provider he used. There's something related to money laundering issues that's why this incident happens.

This site gives additional tips to avoid getting blacklisted on coinbase https://steemit.com/bitcoin/@beatthefish/how-online-gamblers-can-avoid-the-coinbase-blacklist

[danherbias07]

I have never experienced it yet because I read the TOS of our local exchange before I started my account. This is going to be a difficult situation for the one who is having the problem because there's a chance the account won't be recovered anymore especially if it's written in the TOS.

So, I don't know how to answer this. Perhaps customer service will be the only way to do it first.
My only tip is to use a wallet that has cheap fees. Mycelium for example is a good choice and I used that before when I passed my gambling funds to Mycelium and then to our local exchange. It worked somehow and I didn't have any problem with my account.

[Nrcewker]

It’s better to transfer the funds from the gambling site to your cold wallet. Then transfer the coins to the exchange. I know it might become little expensive, but still it’s best to deal with this type of issues. If you use a non custodial wallet, then at first transfer the coins in this wallet, then it will mix your coins with other funds, and it will fresh send the coins from your non custodial wallet to the exchange. I currently follow this trend in Binance and it always works for me.

[Ojima-ojo]

One mistake is don't do it. The exchange will force you with everything that you haven't complied yet and if you don't do it then your funds will left on them. And if you don't adhere to their compliance, it's up to you if you can take that your funds will be left there forever and they'd give you a window period on how long you have to comply with it. I've done that mistake before and the exchange that we have locally have warned me about it and they're very strict with it. Well, I stopped trading on them and that's not a loss for me but for them as they lose a customer.

Well in the situation where you are given a chance to remedy the situation by may be uploading a document or even go through second tier kyc verification it becomes better and you can amend things, but in the situation where your account is outrightly locked before you notice or immediately you make a direct deposit from a gambling sites.


Also we have to acknowledge the fact that not many casinos have such bad relationships with exchanges and sometimes when there is any issues regarding receiving of funds the exchanges are very clear on that from there terms and conditions.

[Ultegra134]

Encountered what OP has been experienced. Also I don't think its about regulated or not since If I'm not wrong there are series of blacklisting of wallets happen before even if the casino is regulated. That's why if we know that our funds came from casino we better redirect it to exchange first before we send it to our local wallet providers or in coinbase. Since there are certain regulations or rules that prohibit them to have a transaction came from gambling sites that's why other people like OP got blacklisted from that wallet provider he used. There's something related to money laundering issues that's why this incident happens.

This site gives additional tips to avoid getting blacklisted on coinbase https://steemit.com/bitcoin/@beatthefish/how-online-gamblers-can-avoid-the-coinbase-blacklist

Good thing I'm not using Coinbase. The article you quoted mentions permanent account closures, with no warning whatsoever. Paying double fees and going through the hassle of using a middleman service (another wallet) to send funds from your gambling account to the exchange is a hassle, in both time and money. It's completely unnecessary and as the article suggests, it's simply best to steer away from it altogether. Just as the article suggested, Coinbase's TOS is unclear on gambling transactions, are there specific casinos that are banned, or is it gambling entirely? There might be a "blacklist" like you suggested, but it's best to be avoided.

[blockman]

One mistake is don't do it. The exchange will force you with everything that you haven't complied yet and if you don't do it then your funds will left on them. And if you don't adhere to their compliance, it's up to you if you can take that your funds will be left there forever and they'd give you a window period on how long you have to comply with it. I've done that mistake before and the exchange that we have locally have warned me about it and they're very strict with it. Well, I stopped trading on them and that's not a loss for me but for them as they lose a customer.

Well in the situation where you are given a chance to remedy the situation by may be uploading a document or even go through second tier kyc verification it becomes better and you can amend things, but in the situation where your account is outrightly locked before you notice or immediately you make a direct deposit from a gambling sites.


Also we have to acknowledge the fact that not many casinos have such bad relationships with exchanges and sometimes when there is any issues regarding receiving of funds the exchanges are very clear on that from there terms and conditions.

Let's say that casinos have direct relations with exchanges but that won't change a fact that if the exchange rule is about direct deposits from casinos are considered dirty to them, they'd tag your coins as dirty. However, I don't think that all exchanges are going to certainly lock your account without doing an investigation and they won't release your coin. The likely thing to happen is they'll lock your account and ban you but they'll allow you to withdraw and release your assets.

[Mrbluntzy]

Creating this thread for us to discuss what ways to resolve wallet blacklist on exchange because of gambling related issues.


What motivate me to start this thread is a recent event with a popular exchange which freezes a customer account because of funds received from gambling site as rewards, so in this kind of situation where a wallet got blacklisted what are the ways to go about redressing and to redeem the situation legally.

This is not a very serious problem for gamblers, if it was a big problem then you will find many gambler tendering their complains about it but there are many exchange that doesn't have problem with you withdrawing your coin from a casino. The way to fix this problem if you are a victim is to find another exchange that doesn't reject your deposit from casino. Remember I said that their are many exchange that doesn't have problem with it.

[delfastTions]

Creating this thread for us to discuss what ways to resolve wallet blacklist on exchange because of gambling related issues.


What motivate me to start this thread is a recent event with a popular exchange which freezes a customer account because of funds received from gambling site as rewards, so in this kind of situation where a wallet got blacklisted what are the ways to go about redressing and to redeem the situation legally.

This is not a very serious problem for gamblers, if it was a big problem then you will find many gambler tendering their complains about it but there are many exchange that doesn't have problem with you withdrawing your coin from a casino. The way to fix this problem if you are a victim is to find another exchange that doesn't reject your deposit from casino. Remember I said that their are many exchange that doesn't have problem with it.

It seems to me that since an increasing part of businesses such as cryptocurrency exchanges are trying to operate in a completely legal space and not have any claims from control authorities, local regulators and even law enforcement agencies, clients of such exchanges should still be prepared for negative developments  events.  This is now worth keeping in mind constantly.  It’s just that the experience of other players reliably suggests that checks of client wallets and the origin of money in client accounts may well be sudden and can cause a lot of unpleasant moments.  This can happen even when the casino and exchange client is completely calm and did not expect this at all and did not even think about it. 

Unfortunately, sudden checks and even blocking of funds until the origin of these funds is clarified have become increasingly common in cryptocurrencies and this greatly upsets all law-abiding owners of cryptocurrencies.

[Ojima-ojo]

Unfortunately I don't think there's much recourse for the customer. If funds deposited are locked by the exchange, he will need to complete a KYC procedure, if not he will need to mix his funds or to convert them into another cryptocurrency on another exchange before sending them to this exchange again, and from another address of course.

I do not really understand you. You mean that the coin might be seized or locked in which the customer of the exchange that his fund was locked because he deposited from a gambling site will need to complete a KYC verification. That might be true but I do  not know. What I am confused about is that you further said 'if not', which means if the coin is not seized. If the coin is not seized, how can the person know that he need not to send coins from gambling site when he does not know. Or what you mean is that to avoid the coin not to be sized? It is better for the person to send the coin to a noncustodial wallet instead and not an exchange, especially if it is bitcoin because bitcoin transaction fee is high on exchanges than usual and this exchanges like Coinbase make the gambling rules hidden in their ToS. You do not need to convert the coin to another coin. People have said they send the coin to noncustodial wallet before sending to the exchange and no problem after they send it to the exchange.

I think gambling deposits are viewed with the categories of mixed coins and government regulations are always against such moves but the confusion is in when the exchange made the law hidden in the TOs to the point that the depositor won't know what to stand on since he may not have read any where that depositing funds from gambling site's or a mixer service is prohibited, had it been the move is mentioned that way user of that exchange will be careful not to deposits money from such a source.


Back to the topic, what I mean is not whether or not the accept coins from gambling, but to know how to resolve issues with blocked account due to Gambling involvement.

[livingfree]

This is not a very serious problem for gamblers, if it was a big problem then you will find many gambler tendering their complains about it but there are many exchange that doesn't have problem with you withdrawing your coin from a casino. The way to fix this problem if you are a victim is to find another exchange that doesn't reject your deposit from casino. Remember I said that their are many exchange that doesn't have problem with it.

Might not be a serious but many experiences this.

And that's why each other is helping and giving tips on how to avoid this when you're going to send your funds to the exchanges.

Don't go there as soon as you're withdrawing your funds because this problem will continue to exist because of the policies that are coming from them.

[GeorgeJohn]

Creating this thread for us to discuss what ways to resolve wallet blacklist on exchange because of gambling related issues.


What motivate me to start this thread is a recent event with a popular exchange which freezes a customer account because of funds received from gambling site as rewards, so in this kind of situation where a wallet got blacklisted what are the ways to go about redressing and to redeem the situation legally.

some exchange who doesn't that is exchange that is conscious of kyc verification, so I know quite well that coin based is one of them, they wish to know the exact platform you got your cryptocurrency so that they will not be in problem, for me, since you gave done your KYC to any exchange, I have not seen the reason coinbase or any exchange that follows same principle to freeze someone account after you been documented properly in their platform...because its obvious that the essence of KYC is to know you very well.