The Florida-based Peter Smith founded Blockchain.com in 2012. He still is the CEO of the company, which claims to be responsible for about 28% of all BTC transactions since 2012. In spring 2021, the company raised $420 million and received a valuation of $5.2 billion. In April 2021, Smith announced the “first-ever” digital asset partnership with an NFL team, the Dallas Cowboys. But times have changed. The crypto & fintech market collapsed. Many hyped companies are faced with lethal liquidity troubles. Blockchain.com may be one of them given their payout issues.
The Trading Account Trap
Peter Smith (pictured left) and his company have performed well in the good years. Blockchain.com has tried to convince its approximately 37 million customers to stop using their (non-custodial) Private Key Wallets and to trade via custodial Trading Wallets (Trading Accounts). In return, customers were promised low costs and rapid execution. Many customers were convinced by these promises, which, however, turned out to be a trap.
Now withdrawals from these custodial trading wallets are frozen by Blockchain.com, which is operated by the unregulated Lithuanian Blockchain (LT) UAB (read our report here). Officially, the reason is that they want to perform additional KYC checks and have additional data from the already verified customers. Until the KYC checks are completed, withdrawals are blocked as a precaution, they say! These KYC checks then take weeks or continue forever without feedback from the responsible support team that does not even get in touch. The withdrawals remain blocked and initiated withdrawals are frozen. Transfers to the Private Key Wallet are also no longer possible. The funds are frozen for a long time if not forever!
On 15 June 2022, Peter Smith promised that Blockchain.com would be a safe haven in these difficult times. In particular, he assured clients that their fund would be available at any time:
We continue today to make your funds available when you need them and to safeguard your funds when you don’t. This is our promise to our customers and to the ecosystem.
Peter Smith on Medium
Peter Smith‘s promises must indeed be a mockery in the eyes of the thousands of embittered Trustpilot reviewers. Legally, his statements are misleading and untrue.
Trustpilot Scam Rating
The Trustpilot reviews and the corresponding 2-3-star “Scam Rating” provide the perfect picture of the obvious “scam behavior” of Blockchain.com. It currently looks like the crypto giant has liquidity problems and prevents or delays withdrawals. We advise all clients to be extremely cautious and seek legal advice. Many Trustpilot reviewers report the very same “Trading Account Trap.”
Reports Problems
If you are experiencing issues with Blockchain.com, please report them to FinTelegram via our whistleblower system, Whistle42. We will collect and analyze the complaints and discuss a joint course of action with our lawyers.
