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Can we call Unocoin Unethical Yet?

Update:

Unocoin has acknowledged the issue publicly and posted the details on their blog.

Summary

  • Unocoin exchange has not deposited ZIL tokens sent by multiple users including mine for over 24 hours now.
  • Every time a different reason was given
    • Technical issue
    • Issue with the wallet provider Bitgo
    • Issue resolved and manually depositing the pending ones
    • Trading engine has issue so we have stopped crediting deposits.
  • While the last one is conflicting with the earlier ones, Unocoin is holding funds of users unethically.
  • Until now, the exchange has not come out and announced the issues in public. Another unethical move.

How it all began

On the night of May 18, a few users including me observed that ZIL is trading at over Rs. 60/- (600% higher than market average) on Unocoin. Although it looked fishy, I thought of giving it a shot. Since the ZIL withdrawal fees are higher in most exchanges like 50-60 ZIL, it didn’t seem right to transfer a small amount.

So I transferred 1683 ZIL, 50 were taken by the exchange as fees to Unocoin. At the time of this writing it has over 5700 confirmations.

When the ZIL were not credited to the wallet, it hit me, I had just made one of the biggest mistake of my life.

Unocoin says “Technical Issue”

Unocoin has a telegram group. I used my other phone (not the normal telegram ID @ThatNaimish) to enquire the status of Zilliqa Deposits. I came to know there is a “Technical Issue”.

I called Unocoin Support, they told me there is a “Technical issue” and it should be resolved by morning.

By this time I assumed Unocoin was playing the same game many other exchanges play. They were luring people to send the ZIL by keeping high prices on the order book. ZIL will be deposited only after prices are adjusted.

I decided to keep quite because I had made the same mistake I warn our users to not make. It was embarrassing and all I could do was wait and curse myself.

Prices go down but no sign of ZIL

I had a long drive ahead of me in the morning and since I had already made up my mind to never trade again on Unocoin, I figured I will do my final trade once I reach my destination. But I tried in between.

An hour before noon, I checked the prices and they seemed to have been on par with the market average. But my 1633 ZIL were still not in my wallet. Browsing through the telegram group I found a message from the CEO Sathvik Vishwanath, a clarification of the said “technical issue”

Technical issue on the Wallet Provider’s side

Vishwanath clarified that the technical issue was on the side of the wallet infrastructure provider Bitgo. An indexing issue caused them to “miss some transactions” and that they will work on them on individually and credit the ZIL.

I bought it. So did many others. After all, the CEO also shared the following image:

A response from Bitgo shared on the unocoin telegram group

Unethical Move #1: ‘No Public Announcement’

Unocoin and Vishwanath should announce an issue as big as this publicly. Atleast acknowledge the issue, give a proper ETA instead of “it will be fixed by end of day”.

Vishwanath kept on insisting that they have missed around 75-100 transactions, which is not a big number and will be resolved quickly. 12 more hours later – It is not fixed.

Vishwanath went offline after 4 PM and haven’t been seen since.

Some Users got their ZIL

After the announcement, some (read: one) users reported he got his ZIL.

Vishwanath went on to say later that the new deposits are working without any issues. No one concurred to this on the telegram group though.

New Markets launched as ZIL no longer remains Priority

Soon after Vishwanath told the group that now there is no ETA on the issue and its in the hands of Bitgo to manually credit the deposits which could even take a week (refer the screenshot above).

Despite such issue, three new markets were launched – ZRX, CVC and REP. One more was later launched, it was GNT.

We were told the trading was disabled for 1 hour for these tokens but deposits were working. This is an important point to remember for what you will read a little while later.

Unethical Move #2: Continuing to let people Deposit even after knowing there is an issue

Vishwanath and a fellow community moderator @mollenmeow argued with users that they weren’t aware of the issue and by the time they found out, the issue was fixed. So no point in stopping deposits.

Mr.Vishwanath, the deposits should have been halted the moment you decided to write an email to Bitgo. Oh wait, the deposits should have been halted the moment you received more than 10 calls about the issue. That is the ethical move.

The issue was not resolved. Unocoin continued to accept deposits and let the users suffer, who are still waiting for their tokens.

Zilliqa Withdrawal fees reduced to Zero

This is the one good outcome of the entire mess.Vishwanath listened to the users and reduced the withdrawal fees to ZERO for ZIL until two more days after the issue is resolved.

One more call to Unocoin: Should be sorted by Midnight they said

As I said before I had a long drive scheduled today. So while on a halt in the evening I decided to give Unocoin customer care a call and ask about Zilliqa.

I was told the issue is being handled, there was a “technical issue”, but my ZIL should be credited by midnight. I believed them. We also mentioned all the updates on our List of issues post

No Zil and it is already passed my bed time

It was almost midnight. Kolkata was on the verge of winning when I called Unocoin again. Shankar (name changed) answered. I recorded the call this time, my gut told me to do it and I am glad I listened.

What I heard could have two possibilities:

  1. Unocoin is highly unethical as an exchange
  2. Shankar was misinformed and he said things that aren’t true

The Final Call With Unocoin for the Day

As soon as Shankar answered, I asked “When will my Zil be credited?”, to which he replied with the same scripted answer about “Technical issue”.

As a trader I am pissed. I narrated the same ordeal I wrote above, pleading him to give me a better answer this time. He did.

“There is a technical issue going on in like buying and selling, trading in that region. That’s the reason its been kept on hold.”

-Unocoin Support

This was not the answer I expected. All day we were told a story that differed from this narrative. I didn’t believe him because the CEO shared a communication with BitGo earlier.

As shocking as it was to hear, I told Shankar that this is unethical. They should not hold our tokens, they should stop the trading if there is an issue with trading. It was as if my prayer fell on deaf ears, Shankar merely said he will take the feedback.

When I told him to credit the deposits, he said then people will try to trade and that will fail. I argued I just want to withdraw my funds but it was all in vain.

After a few more arguments wherein he went on to say two more times that our deposits are held on purpose because there is an issue with trade engine, I informed Shankar that I have recorded the call. I will be publishing a report using the info he provided. If he wants to clarify anything further he can, to which he told me he will send the feedback to his supervisor.

We have sent the audio to CEO Sathvik Vishwanath and reached out to Sunny Ray on Twitter for a response. We will update the post once we get a response.

Indian Exchanges Need to be more Responsible

Not just unocoin, we encounter issues with all exchanges everyday. Many of these exchanges refrain from releasing a statement or sometimes even from acknowledging the problem.

In case of Unocoin, we are left to wonder which version of the story is correct.

They have been in existence since a long time, shouldn’t they have learnt to not make mistakes like these?

What do you think is happening at Unocoin? Can we call them Unethical? Let us know in the comments below


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