Product: Money transfer, virtual currency, or money service

XXXX XXXX XXXX XXXX XXXX XXXX, IL XXXX XXXX XX/XX/XXXX Consumer Financial Protection Bureau XXXX XXXX XXXX Iowa XXXX, IA XXXX Subject : Formal Complaint Against Crypto.com for Failure to Disclose Transaction Limitations and Unfair Practices Dear Consumer Financial Protection Bureau, I am writing to formally file a complaint against Crypto.com, internal reference number XXXX, regarding their handling of my cryptocurrency transactions, which have resulted in significant financial harm. This issue involves their failure to disclose critical limitations on the use of standard features of XXXX ( XXXX ), XXXX of the top XXXX cryptocurrencies. Their actions represent a breach of fiduciary responsibility to their users. 
Summary of Issue : On XX/XX/XXXX, I attempted to deposit XXXX Litecoin ( LTC ) into my Crypto.com account using a MimbleWimble transaction, a privacy feature native to XXXX since XXXX. XXXX is akin to setting a PIN code to keep your wallet private. Despite being a well-established and widely known protocol, Crypto.com failed to warn meor any of their usersthat using this basic privacy feature would lead to funds being withheld. 
Crypto.com has acknowledged ownership of the funds but refuses to return them unless I pay an additional {$100.00} fee. They initially suggested sending the funds to a destination where they would be permanently lost. At no point prior to or during the transaction did Crypto.com provide clear disclosures about the incompatibility of XXXX transactions or any potential risks to users. 
On XX/XX/XXXX, I withdrew XXXX XXXX from my account, demonstrating my routine use of the platform for legitimate transactions. This further establishes that my account history has been normal and responsible, making Crypto.coms current actions inexplicable and harmful. 
Details of the Incident : Transaction Date : XX/XX/XXXX Transaction Type : MimbleWimble ( Privacy Protocol ) Amount : XXXX LTC Key Issues : XXXX. Lack of clear and visible warnings about unsupported transaction types.

2. Unjustified withholding of user funds without proper notice or explanation.

3. Imposition of an additional {$100.00} fee to return funds despite Crypto.coms acknowledgment of ownership.

Laymans Terms Analogy : To put this into perspective, imagine using a PIN to keep your wallet private. After choosing this added security feature to protect your personal finances, you find that your bank refuses to release your money, claiming you violated undisclosed terms. This is essentially what Crypto.com has done with XXXX XXXX feature : they have penalized me for using a standard, native option designed to keep my wallet and transactions private. 
Breach of Fiduciary Responsibility : As a leading cryptocurrency custodian, Crypto.com has a responsibility to disclose material limitations on the transactions they process. XXXX XXXX feature is not an obscure or experimental feature ; it is a fundamental protocol enhancement introduced in XXXX to improve privacy and security. By failing to warn users about the incompatibility of this feature with their platform, Crypto.com has : 1. Neglected their duty to act transparently and in good faith.

2. Put users like me in a position where significant financial harm could occur without our knowledge.

3. Created a system where they unjustly profit from fees imposed on users attempting to recover their own funds.

Compliance and Money Laundering Prevention Claims : Crypto.com contends that my use of the MimbleWimble transaction protocol violates their anti-money laundering ( AML ) policies. However, this argument is flawed : No Prior Disclosure : Crypto.com provided no warnings or disclosures about the incompatibility of XXXX transactions with their platform or policies. 
Legitimacy of XXXX : XXXX is a built-in privacy feature of XXXX, XXXX to encryption. It does not inherently make transactions illegal or suspicious ; it enhances privacy, which is a common and accepted practice in cryptocurrency. 
XXXX Transparency : XXXX compliance involves reporting suspicious activity, not unjustly withholding or penalizing legitimate transactions. 
Unreasonable Fees : The {$100.00} fee demanded to return my funds is excessive and disproportionate. 
Relevant Regulatory Guidelines and Legal Actions : Recent regulatory actions and proposals highlight the need for transparency and consumer protection in digital and cryptocurrency transactions : CFPB 's Expansion into Digital Payments : The CFPB has moved to regulate digital wallets and payment apps, indicating that similar consumer protections should apply to cryptocurrency transactions. This includes ensuring that users are informed about transaction limitations or risks associated with certain features.

SEC and CFTC Enforcement : Both agencies have taken numerous actions against cryptocurrency platforms for fraud and manipulation, emphasizing the importance of clear and fair practices. These precedents suggest that platforms like Crypto.com should provide explicit information on transaction protocols to avoid consumer harm. 
CFPB Proposed Rules : In XXXX, the CFPB proposed rules to oversee larger nonbank digital payment providers, which could extend to Crypto.com, mandating transparency in how transactions are handled.

Legal Challenges : The case of XXXX and XXXX vs. CFPB, where tech groups challenge the CFPB 's regulatory overreach, underscores the ongoing debate about how digital payment platforms, including those dealing with cryptocurrencies, should be regulated for consumer protection. 
DOJ and SEC Actions : These agencies have charged crypto companies for various violations, setting a precedent for holding platforms accountable for not adhering to established financial practices, including transparency and consumer rights. 
These actions and guidelines demonstrate a regulatory trend towards ensuring that digital and cryptocurrency platforms operate with the same level of transparency and consumer protection as traditional financial institutions. 
Impact : This incident reflects a systemic failure on Crypto.coms part to uphold transparency and user protection. Their lack of clear disclosures not only caused me unnecessary stress and financial loss but also undermines trust in their platform and cryptocurrency custodians as a whole. This is a broader issue that could potentially harm countless other users unless addressed.

Personal Statement : As a responsible consumer, I have trusted Crypto.com to manage my digital assets with transparency and integrity. This experience has caused significant stress and financial uncertainty. I believe many other users face similar risks due to Crypto.coms inadequate disclosures and questionable practices. Addressing this issue will ensure cryptocurrency custodians are held accountable and users are protected.

Evidence Supporting My Complaint : 1. Screenshots of Crypto.coms deposit page showing no disclaimers about XXXX transactions.

2. Correspondence with Crypto.com acknowledging ownership of the funds and outlining their demands for recovery.

3. Documentation of my compliance with their retrieval process, including their {$100.00} fee demand.

4. Record of previous successful XXXX transactions, including XXXX XXXX withdrawal on XX/XX/XXXX. 
I trust that the CFPB will take decisive action to address these concerns and protect consumer rights in the growing cryptocurrency space. 
Thank you for your attention to this matter. Please do not hesitate to contact me if further information or documentation is required. 
Sincerely, XXXX XXXX XXXX Chat Log with Crypto.com : Attached below are the details of the chat log screenshots with Crypto.com. These serve as evidence supporting the claims made in this formal complaint.

Detailed Evidence from Chat Logs with Crypto.com : 1. **Acknowledgment of Fund Ownership** : On page 2 of the chat log, Crypto.com explicitly acknowledges the ownership of the XXXX XXXX  but demands an additional {$100.00} fee for their return. 
XXXX. **Attempt to Send Funds to a Dead Address** : On page XXXX, Crypto.com proposes returning the funds to a " destination address '' that they indicate could result in a permanent loss of the assets, violating user trust and standard practices.

3. **Lack of Disclosure About XXXX  Transactions** : Throughout the chat log, no clear or prior warnings were given regarding the incompatibility of XXXX transactions with Crypto.com 's policies. This absence of transparency contributed to the financial harm incurred. 
The above points will be integrated into the CFPB document under the " Evidence Supporting My Complaint '' section.