Poloniex Pressure Sees Startup Go Viral to Win Funds Back

Poloniex customers continue to face the fallout from changes to its terms and conditions amid complaints of inadequate support.

Cointelegraph understands that after the changes, the exchange began sporadically suspending service to users from countries subject to sanctions or other embargoes by the US.

Among these are Russian users, of which one, Blockchain music startup Soundchain.org, found its entire investment cache frozen after the new rules took effect.

“We came across a problem with withdrawal of our project funds allocated on our financial director's account from Poloniex exchange,” CEO Artyom Abaev told Cointelegraph in emailed comments.

“As a result, our operational activity can be frozen soon, as far as we're not allowed to withdraw funds from Poloniex exchange for uncertain reasons.”

Abaev attempted to resolve the issue via Poloniex customer support channels, but received no response. The situation has become increasingly common in recent months, with Poloniex originally sounding the alarm about its lack of resources in May following an influx of new users.

A submission to Russian-language Telegram feed Decenter meanwhile appeared to have greater success, with the exchange contacting Abaev to return the funds.

“[T]he exchange informed us that they have restored access to fund withdrawal for us and that everything should be fine, although according to their Terms the account must be closed by themselves and the funds must be sent to the address provided by us,” Abaev confirmed in a subsequent message.

While there is no hard-and-fast clause suggesting Poloniex will refuse service to Russian citizens, the language of its terms now suggests individuals could face problems in the event of additional sanctions from the US, he suggested.

Poloniex, Coinbase struggle to cope

SoundChain is an example of teething problems with exchanges that can have dire consequences when large amounts are at stake.

Poloniex’s lack of support has frequently surfaced as a topic of discussion on social media in recent months, while the US’ largest exchange and wallet provider Coinbase-GDAX have experienced similar problems.

Since May, frustrated users - including some with missing or inaccessible funds worth several hundred thousand dollars - have taken to Reddit to get attention from Coinbase staff.

In the face of regulatory hurdles at home and abroad, Coinbase is now seeking to use funds from a $100 mln investment round to improve customer support as a priority.

The problems stem not only from regulators but from the huge increases in entry-level cryptocurrency users flooding well-known exchanges since the start of the year. User numbers for Poloniex exploded 600 percent, it said.