Tangentially related to fungibility…
Bitfinex is holding a customer’s approx $130k (USD equivalent) of BTC hostage because they wish to know the source for some funds deposited years ago. Only the latest example demonstrating that every deposit into a centralized exchange is a risk, fungible or not. not your keys, not your coins.
After bitfinex personally deleted all my posts on their page within 2 minutes I will try it here! It’s been more than half a year with headaches before I now decided to go public. Bitfinex has frozen my account after a withdrawal request of about 2.1 BTC in February. By my standards that is a huge amount of money. Money I would have never dreamed of when starting with crypto to be honest. Back in the days (my account is multiple years old now) I used to trade crypto to crypto only. I have never encountered any problems concerning deposits and withdrawals at bitfinex back then. I probably wasn’t anyone special to them because I was only juggling around a couple of thousand dollars a year (depending on the crypto prices).
Anyways, as we all know crypto prices rose immensely in the beginning of this year. That was when I decided to withdraw my coins. Upon request they claimed to have frozen the account because of an automated KYC procedure. As much as I understand it, you would only need to verify if you started trading fiat currencies. I did not do that. However, I thought it might just be some security feature to protect me as the account owner. After all, this wasn’t “peanuts” anymore and because it was (and is) so much money for me I happily agreed to verify.
Since then I ran through an odysse of providing documents and declarations of all kinds. Some of them were super private. They wanted me to proof my identity, which I did. The standard procedure with passport and proof of address.
After that they wanted a proof, where I got the very first coins from that I deposited many years ago. Those coins they never cared about for so many years while letting me do many deposits and withdrawals in the meantime. Since I originally bought those bitcoins 6 years ago together with my old roommate that was quite a task. We found the transaction and sent them all necessary files and transaction data.
But not enough. I now had to proof that he was actually my roommate, which was quite difficult too because we don’t live together anymore. Because of data protection regulations the landlord from back then needed a signed request from both of us in order to hand out the proof to me. (It’s no joke, GDPR is taken serious in Germany.) To clarify: I verified myself and my old room mate. I did not forge any documents and I did not lie anywhere throughout the process.
I finally send them the proof from the landlord. Not enough again. I now had to proof that I went to school with that roommate. So both of us had to send them our school certificates also. Not enough again. They suddenly started asking me about other withdrawals from 3 years ago. I proofed that I sold the crypto for cash and transferred the cash to my bank account a week later.
After that, they told me to wait again. That was almost 2 weeks ago. No reply.
I’m just so tired of this. Just angry, exhausted and worried. By now, they probably know more about me than most of my friends and family. Financially and in general. Plus they have copies of my entire identity from A to Z. At the beginning I thought it’s really just a way to prevent my account from getting robbed but after all I’m just worried about their real intentions.
To bitfinex: Please give me back my account and stop this shady practice.
To the community: What else can I do?
These centralized exchanges are out of control and best avoided entirely. Routinely freezing customer funds indefinitely “because we have to kyc” is such a sickening racket.