And that's how we replaced banks with shady compliance screeners.
Whether you're using a centralized crypto exchange (@coinbase or God forbid an entity like @MEXC_Official) or "decentralized" swapper i.e. @HyperliquidX you're now less protected than you're with the bank.
Before:
Banks told you what you can and canât do. They blocked transfers, limited your withdrawals, and restricted entities you could interact with
While banks implement countless rules there was at least some logic in place. They often give you a clear reason for the block.
They don't confiscate your funds and give you an option to take your money and leave.
Now:
Your wallet gets a risk score. It's an algorithmic score based on your wallet activity which by no means an indicator of any wrongdoing but merely a rough estimate of "potential" wrongdoing.
anything above âmedim riskâ â banned.
That's how these services work. We know that because we know the inner workings of the compliance industry.
unfortunately, most of these new trading and exchange platforms comply blindly. They're not resilient and have little to no practical means to put the interests of users first.
The end result, itâs easier to block you than to deal with you.
So, as a result:
-
âDeFiâ services do the blocking en masse but unlike banks they don't even give you the reason. Sometime they may even not let you withdraw your assets.
-
Centralized exchanges and crypto swap services may easily confiscate the funds if they see a small risk associated with the wallet. This happens a lot more than you think.
They are not as regulated as banks and hence there is little someone can do to get them to act responsibly.
- There are countless cases where people assets were confiscated (we wrote about some of them in the past).
We know a user with 400k frozen at @MEXC_Official. There were also many cases with frozen funds when using crypto swap services.
Sometimes, this happens just because the provider knows the user's IP address and understands that there are no legal means for a user to appeal.
So what's your way out of this?
Use systems where:
⢠you know who controls the flow
⢠you see the risk upfront
⢠you stay in control of your funds
for instance, below you can see the crypto swap interface in unstoppable wallet which clearly shows the risks behind the swap provider when swapping one crypto to another.
Peace!
https://x.com/unstoppablebyhs/status/2038525355997196640