How did I end up with $215k on Blockchain Exchange?
Imagine my surprise today, when I found my digital assets on Blockchain Exchange, of around $450, had risen to a staggering $215,000! Growth of 48,000% (Spoiler alert, and scammers, FYI, it hadn’t…)
I’ve been a customer of Blockchain.com since 2017. Back then, they were incomparable with the likes of Coinbase. A clearly explained non-custodial and custodial wallet offering from the outset, customer support dealt with in minutes — and, not in months/years, which is the time it took to get responses from the two tickets I raised with the latter. They were also one of the first to offer an easy-to-use Rewards feature.
So, a couple of years back, when they launched Blockchain Exchange, with some decent sign-up incentives, I was in from the off. It’s been a disappointing ride though. There’s no logic to the amount of times you have to fully authenticate devices and user creds to get to the app, and it’s often exacerbated if you’ve logged into the Wallet, as this kicks you out of the Exchange. Why the Wallet and Exchange aren’t integrated, and assets aligned, who knows? But it smacks of a poor product decision taken to rush something taht wasn’t fully ready out to market.
The experience of trade execution was also really poor. Trades would often time out, or partially complete, and a combination of these factors left me in a situation where, due to some errant reconciliation of trades, alongside about $450 in ETH, I ended up with a USD balance of -$5 and a GBP balance of about £4.10. This means, FIAT wise, I’m in credit, but I can’t clear the USD deficit because, you’ve guessed it, there’s a minimum trade of £5. I raised this with Support, but they seemed unable to help…
For a while, this didn’t cause me any issues, and I was able to still send ETH out of the Exchange. And then, in November 2023, all of a sudden I wasn’t. When I raised this I was told I’d been blocked from transacting because I had an account deficit of USD. I referred them to my earlier support call, and also explained that the situation hadn’t caused an issue to me trading previously.
Fast forward today, and I try again. Still no joy. I contact Support. Their suggestion? I pay in £1 to add to my £4.10 so I can exchange £5.10 into dollars! I tell them what I think of that as an idea. Apart from the fact I don’t really want to solve their problem for them, I do need to move some of my ETH, so I decide to just sell about $10 worth to clear the deficit and unblock myself. But that gets rejected too. User can’t trade, it tells me…
OK, OK, but how do you have a balance of $215,000 (about £170,000)?
As well as my ETH, USD and GBP balances I had a few thousand satoshis left over as dust in my BTC balance — but today I noticed that this figure had actually had 5BTC added to it! Worth almost $215,000!!! That figure shows in my account balance, but is unavailable because it’s assigned to a trade. But there’s no record of a trade, and also, no record of how the 5BTC was added.
What do I think has happened? I think Blockchain have tried to resolve the problem for me by adding $5 — but have instead added 5BTC. Ignoring, for a moment, the fact that this has only come about because of an existential failure to be able to reconcile trades correctly, my bigger question is how can (whether I have access to the 5BTC or not) these assets just appear in my account? For those of you aware of the Post Office scandal in the UK, it all looks a bit Horizony!
I suspect, how this will end up, is that this 5BTC will disappear and they’ll instead give me $5 to help fix my problem. What’s knocked my confidence in Blockchain however is any lack of an audit trail around this. Even if 5BTC has been added to my account in error, I should be able to see where it’s come from.
Exchanges in the UK are currently following up on shifts in the regulatory landscape to make sure all investors have been through a level of KYC and are aware of the risks of trading in the sector. But, at a minimum, investors should expect exchanges to have their houses in order. Blockchain.com doesn’t really look that solid if things like this can happen. What faith, for example, would I put in any work the firm does around proof of reserves?
I asked the Support rep today ‘How do I cancel that Open Order for 5BTC?’ They couldn’t answer. If they could, it’d have been interesting to see if it showed as available within my portfolio balance. Then what? The support ticket associated to this told me the issue was fixed about 2–3 weeks ago, so I reckon this is when the assets appeared. 5BTC may not be much to Blockchain.com, but it’s enough to have surely been noticed as an error by them within that timeframe. And it can’t have just been magicked out of thin air — but it does look like this is the case…
Digital decisions are never a walk in the park, so please get in touch and let me help you find the right way through the technical landscape.
