Adding, my intent is not to spread false FUD. I am telling the truth. My intent is to warn others from giving up self-custody in thinking that is safe. I was going to just keep my mouth shut since with one of the exchanges I promised I would not name them if they re-imburse my funds back. And I am a person of my word. I do not want to see people lose funds. Regulated exchanges are not safe. Though I still will not name the exchange.
I will also add, this happened to me on two different exchanges. Both were bitcoin only, well known and reputable, and regulated. Upon depositing funds to convert to USD, my funds were frozen due to the excuse of "compliance".
When I say "frontend to a shady company", some exchanges actually are just a front-end that use an api with a seperate backend company for the transactions and conversions between BTC and fiat. The people at such companies may be well intended, but they might be using a backend company that is the problem. Even if they do everything themselves they are still subjected to gov regulations and can freeze (seize) your funds for compliance reasons. With AML you are guilty unless you can prove innocence which is impossible on bitcoin due to transactions not being trackable, especially if you ever used layer 2 at all.
Adding, my intent is not to spread false FUD. I am telling the truth. My intent is to warn others from giving up self-custody in thinking that is safe. I was going to just keep my mouth shut since with one of the exchanges I promised I would not name them if they re-imburse my funds back. And I am a person of my word. I do not want to see people lose funds. Regulated exchanges are not safe. Though I still will not name the exchange.
I will also add, this happened to me on two different exchanges. Both were bitcoin only, well known and reputable, and regulated. Upon depositing funds to convert to USD, my funds were frozen due to the excuse of "compliance".
When I say "frontend to a shady company", some exchanges actually are just a front-end that use an api with a seperate backend company for the transactions and conversions between BTC and fiat. The people at such companies may be well intended, but they might be using a backend company that is the problem. Even if they do everything themselves they are still subjected to gov regulations and can freeze (seize) your funds for compliance reasons. With AML you are guilty unless you can prove innocence which is impossible on bitcoin due to transactions not being trackable, especially if you ever used layer 2 at all.