Risk Alert: Client Reports Issues with Crypto Exchange WhiteBIT

An alarming trend with cryptocurrency exchange WhiteBIT has surfaced, involving a client complaint that alleges the exchange's unreasonable KYC demands and a lack of transparency. This alert sheds light on the troubling experiences faced by the trader and serves as a cautionary tale for anyone venturing into the crypto world.

WhiteBIT Client: “WhiteBIT Withholding My Funds Despite Meeting All Requirements - Beware of Unreasonable KYC Practices”

A WhiteBIT client attempted to withdraw €11,888, below WhiteBIT’s stated verification threshold of €12,977.5, so additional KYC is unnecessary. Despite fully complying with initial KYC requirements, he faced continuous demands for extra documents.

The client reported the following issues with WhiteBIT:

1. Policy Inconsistency: Withdrawals below the threshold are still met with additional document requests, contradicting WhiteBIT’s policies.
2. Excessive KYC Requirements: Even after submitting all requested documents, including proof of income, funds remain withheld by WhiteBIT. The demands appear redundant and bureaucratic without clear reasons.
3. Deposit vs Withdrawal: Deposits are processed without issue, but withdrawals trigger unjustified demands, resembling a bait-and-switch tactic.
4. Lack of Transparency: Vague responses delay access to his funds, leaving him without clear answers.

Client cites WhiteBIT's lack of regulation

In the complaint, the client also alleged that WhiteBIT is not registered with De Nederlandsche Bank (DNB) or the Virtual Asset Service Provider (VASP) framework, leaving clients vulnerable due to the absence of regulatory oversight.

Is WhiteBIT licensed to operate as a crypto exchange? Let's scrutinize its regulatory status.

WhiteBIT, which claims to have been founded in Ukraine in 2018, presents itself as one of the largest European crypto exchanges. Despite Ukraine passing a bill to legalize cryptocurrencies, allowing exchanges to operate legally and banks to open accounts for them according to the country’s Ministry of Digital Transformation, WhiteBIT has not provided further information to prove its legal operation in Ukraine. Additionally, the exchange has not disclosed details of its licenses, despite claiming to hold multiple VASP authorizations in various jurisdictions.

WhiteBIT’s Facebook page presents a location in Lithuania and our search in the virtual currency exchange registry of Lithuania’s Financial Crime Investigation Service (FNTT) shows a registration result.

However, WhiteBIT's multi-license statement could not be backed up due to a lack of additional details. There remains significant uncertainty about whether WhiteBIT is operating as a legitimate cryptocurrency exchange worldwide.

Bottomline

The rapid rise of cryptocurrency trading has revolutionized finance, offering unprecedented opportunities for wealth generation. However, not only does cryptocurrency trading come with high risks associated with high volatility, but this burgeoning market has also become fertile ground for scams and fraudulent activities. 

Remained regulation opacity in the crypto industry heightens fraud risks, despite appropriate regulatory frameworks developed in some jurisdictions such as Estonia, Lithuania, and Switzerland. Scammers exploit unclear regulations to create bogus platforms, luring traders with promises of high returns. Traders often overlook the inherent risks and fall prey to unscrupulous schemes. The lack of oversight allows scammers to steal substantial funds, with losses from crypto-related crimes rising significantly. 

Traders should exercise caution when engaging with WhiteBIT due to the reported issues and concerns about its transparency in license disclosures. It is essential for traders and investors to verify the legitimacy of exchanges to protect their assets.