How the Uphold Crypto Exchange Preys on Users
Frozen Accounts, Denied Withdrawals Lead to Crypto Losses
Launched in 2015, Uphold crypto exchange has enabled transactions worth over $4 billion to more than 10 million registered users. Marketed as a convenient exchange for beginners, it is available in 180 countries and supports more than 200 currencies (fiat and crypto). It incorporates security features such as 2FA, anti-phishing, and frequent ID verification.
This may sound like music to one’s ears until you read what users say happens when they try to get their money out. Reddit and Trustpilot reviews reveal Uphold’s dark side: users often struggle with withdrawal denials, frozen funds, and restricted accounts. They also claim Uphold’s customer service is at best mediocre and that the spreads are higher than average. Some users have filed lawsuits against the platform after months waiting for their money back.
On paper, Uphold looks like a compliant, regulated player. It is registered with the US Financial Crimes Enforcement Network (FinCEN), the UK Financial Conduct Authority (FCA), and in Europe with the Bank of Portugal. However, repeated claims show the risks associated with heavily regulated, centralized exchanges.
Note to self: a government permission slip is no guarantee. Rather, touted compliance can have the unfortunate effect of lulling consumers into a false sense of security.
Uphold Owns Your Money
Uphold is not only keeping custody over its users’ money but embodying a crypto dystopia. It is leveraging narratives on anti-money-laundering compliance and security to complicate procedures, retaining the capital for longer periods. Uphold allegedly says it has fully backed reserves, yet delayed or cancelled withdrawals suggest a lack of liquidity and solvency.
One Reddit claim from one year ago captures the pattern: a user that tried to make a withdrawal faced a long wait period before his “account [was] closed without any explanation,” leaving him without access to “more than $9,000,” and only “vague emails” from Uphold’s customer-support team.
Crypto education platform Cryptocharged examined the topic two years ago on The Ask Matty Show. After using Uphold since 2017, host Matthew Brienen argues Uphold has become an opportunistic, predatory exchange.
“Previously, especially when [Uphold was] much smaller than now, the customer service was a lot better, more technically experienced. Now as they have grown, they have kind of followed the model of other greedy exchanges of listing these meme coins as soon as quickly as possible to capitalize on that.”
Brienen explains Uphold lists new coins for exchange, but users cannot withdraw those coins. Therefore, Uphold seeks to gain entry and exit fees, by just allowing users to exchange the coins with other assets. After a year of requesting support with withdrawing assets like casper, the answer Brienen has constantly received has been: “we are working on it.”
Users continue to struggle when trying to withdraw money. Lisa, a US-based user, told Econ Americas she bought some crypto years ago. Months have passed since she first tried to withdraw her balance from her Uphold account, and she has not received the money yet. She went to the Better Business Bureau to seek accountability.
One day before this article went live, Uphold finally approved her ID verification. Therefore, Lisa hopes to have the money in her bank account in a matter of days.
“Clearly that goes against basic free will and free-enterprise principles and ethos… I am glad I am cutting ties with the organization entirely and will never invest with Uphold again. It was simply a live-and-learn experience that makes me appreciate reputable entities all the more.”
How to Withdraw Your Funds
Not only Uphold, but every centralized exchange has control over your money. Therefore, the recommendation is always to withdraw your money to a noncustodial wallet after doing any exchange. If you are not an Uphold user, look for alternatives with good reviews. Kucoin is one multicurrency exchange that has swift customer support and a better established user experience.
If you are already an Uphold user, check you have fulfilled all security steps. Based on reviews, Uphold appears to be looking for excuses to avoid dispensing user funds. Uphold usually freezes or closes accounts when any of these steps are pending or outdated. Further, do not withdraw all your money at once, and try to limit withdrawals to up to $3,000 per day. Disable any external applications, such as VPNs. Ignoring these approaches could raise anti-money-laundering alerts and delay or impede the withdrawal.
Also, check whether Uphold supports withdrawals of the cryptoassets you hold. If that is not the case, first exchange those assets with another crypto that Uphold allows you to withdraw. This decreases the risk of getting stuck with frozen or restricted accounts.
According to reviews, Uphold gives importance to its score on Trustpilot. Therefore, if you face any issues with Uphold, submitting a claim on this platform could accelerate the support.
None of these recommendations are ideal, since they imply users are dealing with a coercive and potentially dishonest service provider. Crypto has been made to keep full control over your money, and Uphold has diluted this feature. As soon as customers realize this and take their money out of this platform, they will shelter themselves from further losses or even the unveiling of a regulated scam.
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