Consumer complaint received 2024-03-20
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Fraud or scam — 
Company: Foris DAX, Inc. (TX)

In XXXX, I was solicited by someone presenting themselves as representatives of the Internet-platform XXXX  ( hereinafter referred to as the Merchant ). There is no official information about its owner and/or operator. The same solicited me to invest a substantial amount of my money in their platform. All payments were made in the way of crypto-transactions to wallets nominated as beneficiary wallets by the representatives of the unlicensed financial broker. Some transfers were made through my wallet hosted by www.crypto.com. 
I consider the beneficiary wallets being an integral part of the fraudulent scheme behind XXXX XXXX XXXX. I also know that under the so called travel rule, virtual assets services providers ( VASP ) are put under certain obligations, which include collection and keeping record of information about the beneficiary wallets, especially about if the beneficiary wallet is hosted ( including which is the hosting exchange ) and/or if the beneficiary wallet is unhosted. 
My Request to Crypto.com Based upon the understanding that www.crypto.com is acting compliant and will provide the due care towards its own wallet-holders ( such as XXXX XXXX XXXX XXXX XXXX I through my attorney sent a relevant request for provision of information ( Attachment XXXX Letter of Demand to www.crypto.com ). Such letter was solely based upon the assumption that ( a ) www.crypto.com should have collected the requested information as a part of their regulatory obligations ( if it has acted XXXX compliant as it declares and advertises ) ; ( b ) neither part of the requested information requested is considered confidential and is not protected under any law ( it does not qualify under any rules as personal information ) ; and ( c ) I have justified legal interest to have knowledge about the beneficiary wallet holder and about the crypto-exchanges that possibly hosted wallets, to which I made transactions. 
As a matter of fact, said letter was requesting information ONLY about the name of the beneficiary person and the location ( hosting entities ) of the beneficiary wallets, where I have transferred crypto from the my www.crypto.com hosted wallet. It is based upon the travel rule requirements imposed on VASPs by XXXX  UPDATED GUIDANCE FOR A RISK-BASED APPROACH/ VIRTUAL ASSETS AND VIRTUAL ASSET SERVICE PROVIDERS ( v. XXXX  ). With slight deviations in the thresholds and the required information to be recorded, similar regulations are adopted by XXXX, XXXX and XXXX. 
It shall be noted with this regard, that according to Section 179 of the XXXX Guidance for a Risk Based Approach ( which is the general rule ), the requirements of Recommendation 16 apply to VASPs whenever their transactions, whether in XXXX XXXX or VA, involve : ( a ) a traditional wire transfer, ( b ) a VA transfer between a VASP and another obliged entity ( e.g., between two VASPs or between a VASP and another obliged entity, such as a bank or other FI ), or ( c ) a VA transfer between a VASP and a non-obliged entity ( i.e., an unhosted wallet ). 
On the grounds of the travel rule crypto-exchanges in their capacity as an originator of institutions are put under the obligation to keep record about : ( a ) name and address of the originator and transmitter ; ( b ) the amount of the payment or transmittal order ; ( c ) the execution date of the payment or transmittal order ; ( d ) any payment instructions received from the originator or transmitter with the payment or transmittal order ; and ( e ) the identity of the beneficiarys bank or recipients bank financial institution. 
According to Section 182 of the XXXX Guidance for a Risk Based Approach ( which is the general rule ) For the required information, which the ordering institution must obtain and hold, this includes the : ( a ) originators name ( i.e., the sending persons accurate ( i.e. verified ) full name ) ; ( b ) originators account number where such an account is used to process the transaction. In the VA context, this could mean the wallet address of the VA ; ( c ) originators physical ( geographical ) address, or national identity number, or customer identification number ( i.e., not a transaction number ) that uniquely identifies the originator to the ordering institution, or date and place of birth. For transmitting the geographical address of the originator, that means the address which has been verified for accuracy by the originator VASP as part of its XXXX process ( see paragraphs 148-160 on CDD ) ; ( d ) beneficiarys name ( i.e., the name of the person who is identified by the originator as the receiver of the VA transfer ). This is not required to be verified by the ordering institution for accuracy, but should be reviewed for the purpose of STR monitoring and sanction screening ; and ( e ) beneficiary account number where such an account is used to process the transaction. In the VA context, this could mean the wallet address of the VA. 
Where the counterparty is a non-obliged entity ( i.e. unhosted wallet ), VASPs are still under certain XXXX and fraud prevention monitoring and control measures ( Sections 203 and 204 of the XXXX Guidance for a Risk Based Approach, which also include feasible efforts to collect the information in the above described scope. 
Please note that all my request basically aims at providing information about ( A ) the name of the beneficiary wallet holder and ( B ) about the location of the beneficiary wallet ( if it is hosted by an obliged entity ) or confirmation that it is unhosted or hosted by a not obliged entity. 
According to the applicable regulations, this information is to be collected and stored by the VASPs, www.crypto.com included. I do not consider information about the beneficiary wallet holder and about the location of a wallet a being covered or protected by any privacy laws. If www.crypto.com believes the contrary, www.crypto.com would have to specify, which are these laws that apply to my requests and prevail the above-cited regulatory framework provisions. 
The travel rule as it is being implemented by banks and payment services providers does not foresee and does not impose any restrictions upon them to disclose information that has been requested. 
Failure of www.crypto.com to Provide the Required Information Crypto.com responded to my attorneys letter of demand and refused to provide us with the requested information. They pointed out that they would not reimburse me ( XXXX XXXX ) for my losses. By so doing www.crypto.com, failed to provide the required information about the VASPs hosting the beneficiary wallets, where I ( XXXX XXXX ) have made series of transactions to, respectively information that the beneficiary wallets were not hosted by a VASP. By so doing, www.crypto.com does not refer to specific legal grounds, which justify their decision not to provide the required information. On its own, this hinders the consumer to make feasible use of its protected legal rights. 
If www.crypto.com has collected and stored the required information as requested, we do not see a specific reason to not disclose it in front of persons that made transactions to these wallets through their www.crypto.com wallets. 
If www.crypto.com did not collect and store the required information, it would be of course related to some concerns on the side of www.crypto.com about how they comply with their regulatory obligations. 
And last, but not least, if www.crypto.com has collected the required information, but did not raise appropriate red flags depending on the particularities of the case, this will be an issue per se. 
From our legal point of view, the lack of response of www.crypto.com represents a clear example of mistreatment of my consumer rights. 
Misleading Information on the Website of www.crypto.com About Their XXXX  Compliance While www.crypto.com has refused to provide the requested information to the Complainant in accordance with the Travel Rule, there are numerous official statements of www.crypto.com misleading the public that the crypto-exchange is operating compliant to the XXXX  recommendations listed at XXXX : XXXX In addition to the above statements, there are a number of further articles and publications on the official www.crypto.com website, which make the average consumer believe that www.crypto.com is operating in full compliance with the XXXX  recommendations. From our perspective, this method of doing business on the side of the VASPs represents a clear example of misleading the average consumer in the quality of a service, while this quality can not be guaranteed in practice. Apparently, the average consumer would rely on publications like the above-cited and will meet certain economical decisions ( i.e. to make use of the Www.crypto.com services ) in reliance of their good reputation and the applied standards of work. Unfortunately, when the complainant, being a customer provided to Www.crypto.com had a request based upon the XXXX recommendations, which Www.crypto.com falsely claims to obey, the VASP disregarded my request by not providing the information the complainant is entitled to. 
Based upon the above, I consider it my consumer rights being infringed by Www.crypto.com by providing misleading information and by groundless rejection of providing assistance, which could be reasonably required and expected. 
Based upon the above, I as a wallet holder with www.crypto.com and their direct customer as being entitled to file this complaint against the VASP. 
From the way of responding by www.crypto.com, I understand that they failed to comply with XXXX standards and processed the crypto-transactions of the complainant in a completely anonymous way ( without collecting required information about the counterparty and the counter-VASP ). 
If www.crypto.com did collect this information, but failed to provide it to the Complainant without clear legal grounds, www.crypto.com shall be liable for the losses caused to the Complainant for making obstacles for her to exercise his legal rights of protection against the fraudsters. 
If www.crypto.com did collect this information and failed to raise red flag towards the Complainant about possible risks associated with crypto-transfers in substantial amounts to unhosted wallets, www.crypto.com shall be held liable for failure to apply the due care and infringing my consumer rights. 
In consideration of the misleading information about www.crypto.com being XXXX compliant, if www.crypto.com fails to provide the required information under the XXXX travel rule, www.crypto.com should be held liable for compensation to the complainant because such failure hinders the recovery options for the complainant.