PSA: i got shotgun-KYC scammed by PayWithMoon.com, lost $1000 \ stacker news ~bitcoin

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PSA: i got shotgun-KYC scammed by PayWithMoon.com, lost $1000

3638 sats \ 14 comments \ @conduition 14 Jul bitcoin

Today I tried using paywithmoon.com reloadable debit cards to pay with Bitcoin online.

I was going to buy some electronics, so I deposited $1000 worth of BTC. But i wanted to test drive the card first, so I used my Moon X Card to subscribe to a VOIP phone number service. The instant I clicked the "buy" button on that VOIP service website, my Moon account was locked, I see this banner on the website:

I received this email telling me to complete KYC verification.

If you go to the link, it looks like this.

So I reach out to their support team. I tell them I don't want to complete KYC verification. After all that's the whole reason i'm using their service in the first place.

In reply, an agent named "Oscar" says:

Hey there, unfortunately we can not take any actions, including refunds, until verification is completed.

I've sent them a reply pleading to be refunded, but i'm not holding out hope.

Beware of these people. I'd heard their service was reliable, but apparently reputation isn't everything. Maybe they only scam people like this opportunistically and hope not too many of us speak out.

What really confuses me is: What is there to flag? It's not like the card number was stolen. The card is pre-loaded with clean bitcoin. Are they concerned i'm financing terrorism somehow by buying a VOIP number?

Anyways, that's how I burned $1000 this afternoon stackers. I hope your day went better than mine.

Remember the cardinal rule of Bitcoin: Not your keys, not your coins.

In case anyone is wondering:

No, I didn't deposit any "sketchy looking" bitcoins. I deposited coins from a reputable source, no mixers, coinjoins, or instant-exchanges involved.
I was connected to moon over a VPN when signing up, and was also connected to a VPN when making my VOIP purchase
I was using a throwaway email address. Maybe this triggered the flag? If so why wait until after i made a purchase to trigger KYC? Why not suspend my account right away?

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1042 sats \ 3 replies \ @anon 15 Jul

Hi there, CEO of paywithmoon.com here.

While I don't know the details of your specific case, based on the email in your post the bitcoin you sent to our platform was flagged by Chainalysis.

Can you please reply in the support ticket and reference this post so I can track down your case? If your payment was in fact from a reputable source I would like to personally investigate this further as to why the transaction was flagged.

I understand this is frustrating. We do everything in our power to maximize privacy in our services. Unfortunately, we are bound by regulations and compliance obligations that sometimes limit the services we are able to provide and the customers we can serve, and mandates we use technologies to comply with these rules.

116 sats \ 0 replies \ @conduition OP 17h

Thanks for posting here. I replied to the email ticket with a detailed description of my coins' origin.

They came from my employer originally. I used them to buy XMR on an instant-exchange before depositing some of the BTC change into PayWithMoon, so maybe that's the cause of the flag. Chainalysis will sometimes flag coins even if they don't directly originate from a known "bad" source - One of their many flawed heuristics which lead to situations like this.

I appreciate that your business has to comply with KYC laws to keep the governement off your back. We can all agree KYC/AML sucks, and I can live with being denied access sometimes, but opaque rug-pulling isn't an acceptable solution. If your team had simply refunded my coins I would've had no cause to complain. Instead they stonewall me, effectively saying "Your money belongs to us now, unless you KYC."

It sucks that I have to complain publicly to get any recourse. I hope you can train your team to deal with these situations better, and I hope we can come to a resolution where I can get my money back without doxxing myself. Let's take the rest to email.

5 sats \ 0 replies \ @megaptera 15 Jul

We do everything in our power to maximize privacy in our services

So why use Chainalysis? There's a lot of good reasons why coinjoin is legit but probably every "coinjoined coin" is flagged by Chainalysis.

0 sats \ 0 replies \ @BallLightning 20h

I am sorry that you feel that way.

Unfortunately the reputation of your company has been permanently damaged and it is impossible to recover it.

We hope this information is helpful to you.

110 sats \ 0 replies \ @SimpleStacker 15 Jul

Sorry to hear you're going through this.

After reading through their FAQ, I am convinced that even though we might want to support a bitcoin circular economy, this isn't the way to do it. These are basically services that offer a bitcoin layer on top of the traditional financial system, that's why you're running into the issues you're running into. That isn't what we want to support. We want to support a bitcoin-as-foundation circular economy, with at most some horizontal piping between the bitcoin and fiat systems

I'd follow @optimism's advice. Just do the KYC, get your money out, then never use their service again and let people know your experience.

105 sats \ 1 reply \ @optimism 14 Jul

Thanks for the warning.

Here's my recommendation:

Do the KYC
Don't use it, make sure you get the refund
Never use their service again
Get rid of the refunded utxo - either send it back to wherever you got it from, or start a lightning channel, submarine swap out, keep that swapped utxo.

0 sats \ 0 replies \ @byzantine 15 Jul

yes ditto. just get your 1k back

10 sats \ 0 replies \ @OT 15 Jul

I hate when this happens! It needs to be clear about KYC from the beginning.

Still, you need to get those sats back. Just spread the word around and never use them again.

10 sats \ 0 replies \ @openyoureyes 15 Jul

Sorry to say this but it is your fault. Bitcoin was created to get rid of credit cards and banks. A debit card is something in between. Like a credit card for the poor people that get no credit score and have to pay upfront. And the banking sector is a heavy KYCed place. Something like a kyc free banking service does not exist. You have been lied to by advertisers. And moved btc into their walled garden. I hope you learned something.

The next time you want to buy electronics buy them with a normal voucher. And you pay directly with bitcoin without a middleman. The bitcoin company, bitrefill and a lot of other companys that really need you as customer.

10 sats \ 0 replies \ @unschooled 14 Jul

damn, im sorry to hear. i hope you get your almost 1m sats back. that's no joke.

kyc is thorn in the side of bitcoin adoption.

5 sats \ 0 replies \ @SwapMarket 14 Jul

Non-KYC debit cards are being blocked and sunset globally due to regulatory crackdown. Kazepay clients are waiting for refunds for over two weeks already, no ETA. Maybe the issuer will require KYC as well, no one knows. I think your VOIP purchase was not the cause.

5 sats \ 0 replies \ @stack_harder 19h

i'd do the kyc and try to get the sats back, then move on.

But, really, testing new stuff like this, you don't want to be putting 1k USD on at once, start small , 20 bucks or something to cover your purchase

0 sats \ 0 replies \ @d680ecaa8e 15 Jul

KYC complicated scenarios let people leave some wallets or sites.

10 sats \ 0 replies \ @Macoy31 14 Jul outlawed

stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.