Introduction
I have previously posted on how I finally stopped using Poloniex. You can find those posts here and here.
It still continues to surprise me that people persist in using them despite multiple red flags that suggest something is very wrong.
Recap
Just to recap here is a summary for the main reasons I stopped using them:
A complete failure to scale in order to meet periods of demand during significant price movements despite having several years to do so. Often people losing money due to margin calls or inability to execute trades. The same excuses being used repeatedly for the last 4 years.
Consistently terrible customer service.
Huge numbers of complaints from customers never being answered or addressed except when they take to social media - in some cases even that did not help.
Random "manual" verification for withdrawals irrespective of verification status. No explanation of why or any indication of how long such withdrawals would take. Some people stuck in limbo indefinitely.
Suspension of the trollbox "allegedly" to dedicate more staff to customer service - which makes no sense, moderating a troll box is not the same as helping customers with problems. The fact that the troll box had filled up mostly with service complaints seems a more likely reason.
Constant rumours of insolvency - ordinarily these would be taken with a grain of salt, however, given the above behaviour it is hard to dismiss them. Very similar behaviour has occurred in the months (sometimes even a year or longer) running up to the failure of other exchanges.
The New T&Cs From Last Week Simply Add to the Concerns in the Points Above!
I have been catching up with some of last week's news and finally got a chance to look at the new terms and conditions that they released.
If these don't make you reconsider using the exchange then I don't know what will!
Whether it is poor management/ judgment or actual preparation for insolvency is irrelevant - why risk your money if you do not have to?
Anyway - I fully expect the usual moronic responses to this saying that they have been able to use Poloniex without problems and that it is the best exchange.
I heard exactly the same things before MT GOX, Cryptsy or numerous other exchanges failed. Some people like to live in constant denial.
If the warning signs are there and you refuse to listen then perhaps you deserve to lose your money.
The New Terms and Conditions
I can't cover every single detail so I will highlight the things that stand out to me most. You can read the full information on Poloniex or if you prefer there is a Pastebin here.
THESE TERMS OF USE CONTAIN A BINDING ARBITRATION CLAUSE AND CLASS ACTION WAIVER THAT IMPACT YOUR RIGHTS ABOUT HOW TO RESOLVE DISPUTES. PLEASE READ IT CAREFULLY.
This is right at the top and is shortly followed by:
These Terms affect your legal rights and obligations, including but not limited to the binding arbitration provisions contained in Section 23 below that may significantly affect your legal rights, including your right to file a lawsuit in court and to have a jury hear your claims. If you do not agree to be bound by these Terms, do not access or use the Services.
Poloniex reserves the right to change or modify the terms and conditions contained in these Terms, including but not limited to any policy or guideline of the Site, at any time and at its sole discretion.
We will provide notice of these changes by posting the revised Terms to the Site and changing the "Last Revised" date at the top of the Terms, or by emailing Users at their provided email addresses, or by any other means as determined by Poloniex. Method of notification will be left to Poloniex's sole discretion. Using a particular form of notice in some instances does not obligate us to use the same form in other instances. Any changes or modifications will be effective immediately upon posting the revisions to the Site or at the instant that Poloniex transmits the information to the Users (e.g. via email). These changes will apply at that instant to all then current and subsequent uses of the Site. You waive any right you may have to receive specific notice of such changes or modifications. Your continued use of this Site acts as acceptance of such changes or modifications. If you do not agree to the Terms in effect when you access or use the Site, you must stop using the Site.
I won't copy all of Section 23 here because it is too long but will include this excerpt because it is relevant to the top paragraph:
any dispute arising under your use of the Services shall be finally settled on an individual basis through confidential, binding arbitration in accordance with the American Arbitration Association's rules for arbitration of consumer-related disputes, available at www.adr.org or by calling 1-800-778-7879, and you and Poloniex hereby expressly waive trial by jury...
ADDITIONALLY, YOU HEREBY WAIVE YOUR RIGHT TO PARTICIPATE IN A CLASS ACTION LAWSUIT OR CLASS-WIDE ARBITRATION. We each agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated or representative action.
So basically by using Poloniex you "agree" not to take part in any class action lawsuit against them or any kind of jury trial. Disputes must proceed through arbitration.
They can also change the T&Cs and conditions at any time and in any way.
As soon as they do that and transmit them in any way you automatically accept them the next time you use the exchange - they don't even need to get you to specifically tick a yes box or click on any confirmation.
Just using the exchange constitutes acceptance.
To me this seems like a definite pre-emptive action to protect themselves if Poloniex either negligently or maliciously loses your money.
Perhaps they are preparing for insolvency.
It is hard to say for sure but this should be a massive red flag for anyone who is still using them.
I have no idea how enforceable or even legal this is but it is pretty crazy.
15 NO TRANSFERABILITY
While the Account and the Services provided to a User are not transferable under any circumstance and shall be used only by the User, Poloniex shall have the right to transfer, assign, or sell all the rights, benefits, or obligations to any person and these Terms shall continue to be in force and effect for the benefit of the successors and assigns of Poloniex or its lenders, if any.
Unless I'm misunderstanding this Poloniex can basically sell your account or access to it to anyone they like.
13 COPYRIGHT OF FEEDBACK MATERIALS
You acknowledge and agree that any materials, including but not limited to questions, comments, feedback, suggestions, ideas, plans, notes, drawings, original or creative materials or other information or commentary you provide on our platform or one of our social media accounts, regarding Poloniex or the Services (collectively, "Feedback") that are provided by you, whether by email, posting to the Site or otherwise, are non-confidential and will become the sole property of Poloniex. Poloniex will own exclusive rights, including all intellectual property rights, and will be entitled to the unrestricted use and dissemination of such Feedback for any purpose, commercial or otherwise, without acknowledgment or compensation to you.
So Poloniex "own" anything you say to them or about them?
If that is truly what they are saying I would love to see how they would defend that in court - then again if you believe their T&Cs then you can't take them to court.
Conclusion
There isn't really much more to say.
If you are perfectly fine with all the previous problems at Poloniex and the frankly crazy new "Terms and Conditions" please keep using them.
Either you are so rich that you don't care about money, you get off on taking unnecessary risks or are in complete denial.
That is not me but I wish you the best of luck.
Thank you for reading
