FTX overcharges trader $1M to recover lost crypto, edits T&Cs to justify it
Offshore crypto exchange FTX quietly tweaked its terms and conditions (T&Cs) just hours after it allegedly ignored them to rob a customer of almost $1 million in fees.
Crypto outlet Rekt recently published a “public service announcement” on an anonymous trader’s attempt to deposit more than $6 million in Unit Protocol stablecoin USDP last month.
Unfortunately, they mistakenly sent their funds to an address intended for ERC-20 token PAX — a cryptocurrency not supported by FTX.
FTX, which is relocating its headquarters to Gibraltar and the Bahamas, pledged to return the funds, but only after taking a 15% cut.
However, at the time of the erroneous deposit, that fee didn’t mesh with the conditions outlined on FTX’s own website:
“If you deposit to an incorrect FTX address, we can attempt to recover it, but will charge up to $500 or 5% to do so.”
FTX’s “Wrong Address or Chain” section of its terms and conditions.
Rather than deduct the stated 5%, FTX took another tack: it re-wrote the terms and conditions.
The edited policy now mentions a “minimum 5% fee,” and that recovering unsupported tokens requires “a significantly higher fee,” like 15%.
By the following day, the section of the website in question read:
“If you deposit to an incorrect FTX address, we can attempt to recover it, but may charge a fee to do so, and if we do not generally support the deposited token or method we may be unable to recover it at all.”
FTX chief aware but so far doesn’t seem to care
Speaking about the changes FTX made since Rekt released its original piece, a representative told Protos the exchange’s chief exec Sam Bankman-Fried had tweeted about the situation.
Bankman-Fried has also been in contact with Rekt.
“The terms and conditions on the FTX website have since been updated. However, regardless of whether the page has been edited, the focus should be on their misleading deposit UI, which caused the problem in the first place.”
“FTX has not yet been in contact with the user in question, but we’re confident that will change. Surely their reputation is worth more than these overcharged fees,” said Rekt.
Trader says address snafu was exchange’s fault
According to Rekt, the swift change in its T&Cs isn’t the only problem that FTX has to address.
The out-of-pocket user argues they should not be charged 15% to recover their crypto. According to the trader, the fault of depositing tokens to the wrong address lies entirely with FTX.
In August, PAX rebranded its ticker symbol from PAX to USDP (a ticker already in use by USD Partners).
But the exchange failed to inform its users of the confusing change.
Speaking to Rekt, the trader explained how the mix-up occurred:
[Read more: Cashed-up crypto exchange FTX heads to Bahamas — closer to Tether]
Protos reached out to FTX for comment but as of press time did not receive a response.
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