Letter
Hello, my name is Artyom Abaev, I'm the founder of a blockchain startup for music industry. We came across a problem with withdrawal of our project funds allocated on our financial director's account from Poloniex exchange. As a result, our operational activity can be frozen soon as far as we're not allowed to withdraw funds from Poloniex exchange for uncertain reasons. The funds were raised during the private fund raising among our friends and we expected to spend it for the first round of project financing, team scaling and preparing public presentation. We're renting an office, we have to pay the rent and salaries to our employees. Nobody cares about our problems. Poloniex technical support does not respond to our requests.
We have analyzed public space in Reddit threads and other forums and we concluded that we're not the only ones who suffered and this is problem is widespread.
On the 1st of August Poloniex exchange has amended the Terms of Use and added two points.
"You represent and warrant that you are not:
(a) located in, under the control of, or a national or resident of any country to which the United States has embargoed goods or services;
(b) identified as a "Specially Designated National", or (c) placed on the Commerce Department's Denied Persons List", as mentioned in point 1 of the new Terms.
Our lawyers concluded that there is no law that can require from exchange to refuse providing services to individuals in embargoed countries. Limitations applied by Commerce Department are related to companies and list of specific individuals.
The situation is really troublesome as far as we are citizens of a country embargoed by the USA. According to the exchange rules, we have filled in a ticket to technical support in order to close the account and withdraw funds, and we received the following response:
We replied immediately and attached the screenshot showing inability to withdraw funds as far as e-mail confirmation links are not working.
After that, we haven't received any reply from the support. We do not believe that the biggest exchange that earns millions of dollars on fees can not organize normal operation of the technical support for the clients. User verification for increasing limits and following KYC/AML procedures can take weeks or in some cases months that in our opinion is unacceptable for such a big financial service. Based on our rough estimations, introduction of the new terms must result in closing about 15000 accounts and withdrawing funds from them.
We applied with this problem for a preliminary consultation to Artyom Tolkachev from a legal firm Deloitte, our legal department also considers options to file a collective action in the USA or initiate an investigation in FBI, suspend the business license and freeze all exchange activities for the period of investigation. Recent situation with another exchange BTC-E, in particular seizure of company assets by authorities is really disturbing for us. The company has also included in Terms of use waiving the right to participate in a class action against the exchange, although in our opinion the exchange cannot be higher that US laws if the exchange abuses their authority and operates illegally towards their clients.
It is also worth mentioning that Terms of Use were updated against the background of numerous complaints about the exchange activities. E. g. one of Reddit users claimed that his $15000 account was frozen for a few weeks without any explanation.
At the moment we're developing a website in order to inform the community about the problem and we gather the information about exchange clients who suffered like us; we process applications at reg@soundchain.org in order to consider our strategy with lawyers and break new ground if the situation remains unchanged in the nearest future. We have prepared a form for everyone affected in order to collect and classify the information. We presume that the problem may have low percentage in the total number of users.
No secret that the exchange is one of the leaders in the trading market and many blockchain projects would like their tokens or cryptocurrencies to be listed there. I fully understand that owing to this letter the exchange management may never add our cryptocurrency for trading, however it is much more important to get back our legal funds in order to develop our project.
We do not use this situation for promotion, honestly I would never like to make this fact public, but we don't have any other option as to write this letter. We just want to withdraw the funds and develop our project. Please help us to spread out the information about our problem.