Cryptocurrency exchanges like Changelly gained popularity as they allowed users to convert cryptocurrencies quickly. Unlike in a traditional exchange, a Changelly user can decide to get his funds converted immediately or wait to hit a specific price. However, some users have been venting their issues with the exchange on Reddit, claiming that it can steal people’s funds if it liked. There is no shortage of users who suggest that the allegations are baseless, and the number of people who are complaining has increased.
What Happened With Changelly?
The possibility of Changelly “stealing” Monero (XMR) coins is being posted on Reddit from as far back as December 2017. A Reddit user named @datawizard recently brought the issue back from the dead when he posted a statement from Changelly. The statement reads:
“Once again, our risk management system may put on hold some suspicious transactions, and the security department is working hard in order to process such operations in minimum time. When a customer refuses to provide the required data, we cannot simply return coins as we wouldn’t like to operate and transfer coins that might be potentially stolen or raised by fraud.”
The user argues that if the exchange wants, it can hold back users’ Moneros and never give them back simply because it considers them suspicious.
For a coin like Monero, which guarantees privacy and is infamous for its widespread use on the dark web, the “suspicious transactions” tag could be too big a burden to handle.
Another Reddit post from four months ago shows that a user @moneroexchange13 was disappointed with the Know-Your-Customer (KYC) and anti-money laundering (AML) guidelines followed by the exchange. He also said that there is no option to cancel a transaction on the exchange and that its support team is “misinformed.”
Arguments in Favor of Changelly
The users on Reddit are focusing on a small part of Changelly’s official statement. The exchange suggests that its risk management system “doesn’t mark all transactions out of the blue.” Because of the anonymity of Monero, transactions become untraceable. Thus, all big transactions in XMR get checked before conversion. It clarified that the exchange has no prejudice or mistrust toward the coin and suggests that its KYC norms are designed to curb money laundering via its platform.
Some Redditors also argue that people who do not like the KYC compliance of the exchange should stay away from the platform altogether. These users can opt for a decentralized exchange or simply convert smaller amounts as the exchange explicitly talks about marking larger transactions.
There is another side of the story — Changelly hasn’t clarified how exactly it marks a transaction as suspicious. Additionally, it has confirmed that if the exchange decides that the transaction fails its checks, it keeps all the funds.
There is no doubt that the practice is dubious and can take away funds from several users at once. Regulatory pressures on the use of privacy coins in money laundering have been mounting up for months now, and Changelly will have to find a better way to address these concerns instead of keeping coins with them forever.