i have been cryptocurrency trading on the platform since last year. But since May, I am unable to withdraw money from my crypto wallet.
I have Dh55,000 ($14,976) value of cryptocurrency Locked in the wallet of this trading platform.
i bought cryptocurrency on my credit cardbecause I wanted them to get good returns and also because I didn’t want to link my bank account to my crypto wallet. Did.
Watch: What happened to the price of Bitcoin?
but now i’m facing High monthly credit card charges For late and unpaid interest and penalties.
Do credit card protection programs apply, and did I get any rewards for doing card transactions with my crypto wallet?
I have sent many emails to the trading platform’s customer support team. But no response.
Due to extreme market volatility, the value of my crypto assets also fell. Can you suggest a solution for my financial problem? Alaska, Dubai
Debt Panelist 1: Steve Cronin, Founder DeadSimpleSaving.com
Your financial troubles can be related to three mistakes: trading, trading cryptocurrencies, and using money borrowed from your credit card.
Trading is the buying and selling of assets on a regular basis, rather than holding them for a long period of time.
Very few people make a lot of money from long-term trading. Most people do well from time to time and boast loudly about their successes.
They then lose almost everything, but are very quiet about these losses.
Those new to trading are inspired by social influencers, advertising on trading platforms, and easy trading wins from friends.
It’s pure gambling and should never be done again. Especially when it’s money you can’t afford to lose, and even more so when it’s borrowed money.
Although cryptocurrencies have somehow taken hold, they are still very risky investments.
Risk is significant both for the cryptocurrency you are trading or investing in and the platform you are using to invest.
Cryptocurrency has seen the entire investment market move away from risky investments with fraud, “pump and dump” schemes, broken promises, concerns about the value of cryptocurrencies in general, and even rising interest rates and declining people’s wealth. could cause the value to plummet. money to invest.
Crypto trading platforms can be problematic, especially since few have been around for more than a few years.
There may be technical or security issues. They may have invested their own capital or bet their cash on much riskier assets than investors expected.
You may also face liquidity issues if you do not have enough cash to cover all demand for withdrawals from the platform. Or, again, they may have been a scam and stolen your money.
The cryptocurrency in this trading platform’s wallet may eventually be unlocked if the platform is acquired by a large corporation or another way to restore its financial position is found.
Cryptocurrencies — in pictures
You should immediately sell everything you have and use it to pay off some of your card debt. You should be aware of news, web forums and social media updates.
Using a credit card to invest in anything is a very bad idea unless you can pay off your card balance each month to avoid interest and late/non-payment fees.
You’ll still pay a 3% surcharge on each transaction. We understand the concerns about linking a bank account to a trading platform, but we could have also used a bank account with a low cash balance to limit the risk of fraud.
Because you didn’t pay off your card balance each month, you were trading beyond your means, and even if the platform hadn’t frozen your account, you may have been in debt due to trading losses.
Each card provider has different terms and conditions regarding benefits and consumer protection, so you should read the documentation related to your specific card.
However, I doubt there is any protection or reward for investing in cryptocurrencies or stock platforms. Such incentives would encourage risky behavior.
You should focus on figuring out how to pay off your card debt before it gets too big.
See if you can convert it to a personal loan with a lower interest rate. Find ways to earn extra income, cut back on your expenses, sell your assets, or borrow money from relatives.
Learn from your mistakes and warn others too. That way, your trading adventure becomes a life lesson, not a waste of money.
Debt Panelist 2: Vijay Valecha, Chief Investment Officer, Century Financial
This year has seen significant volatility in the global risk markets.
Cryptocurrencies with the added high-risk and high-beta profile are even more volatile in their price response.
Major cryptocurrencies, including Bitcoin and Ether, have fallen more than 60% this year. But there are also things like: Stablecoin TerraUSD and Sister Token Lunathe market value was completely wiped out.
Reports of problems with cryptocurrency withdrawals have become commonplace this year.
This is largely due to the liquidity crisis, where wild price movements make market makers averse to counterparty risk.
Most cryptocurrency platforms that offer spot wallet functionality are not subject to specific regulatory laws.
The failure of major developed countries to correctly classify and regulate the crypto space only provides more space for such exchanges to grow.
We highly recommend that you check if the crypto trading platform you are using is registered with any regulatory authority.
If you are registered under local government jurisdiction, you should stay in touch with your authorized representative and keep track of your platform provider.
Also, seek out the cryptocurrency investor community forums to see if this has happened to other clients of the exchange.
Having the right to collective bargaining can force the authorities to “suohon” the issue.
In the case of the Terra/Luna cryptocurrency debacle, South Korean authorities have demanded that Interpol issue a red notice for arrest. Do Kwon, co-founder and CEO of Terra Labs After the $40 billion collapse of digital coins.
Investing in cryptocurrencies is often tricky and investors should always use properly regulated exchanges.
However, it is essential to note that even regulated exchanges cannot do much to honor their customers’ obligations during the liquidity crisis in the cryptocurrency market.
A better alternative is to invest in a regulated exchange broker or a contract for difference (CFD) provider.
With such entities, withdrawal of principal/profit is relatively transparent and easy. Because we don’t lock our client’s money in Spot’s cryptocurrency wallet.
Debt Panelist 3: Carol Glynn, Founder of Conscious Finance Coaching
We do not recommend using a credit card to purchase investments.
The only exception is to make a transaction using your card and immediately transfer money from your current account to settle the balance.
However, paying a 3% surcharge on each transaction is also an expensive extra cost that you needlessly incur if you have cash in your bank account.
Focus on paying off your credit card balance in full as soon as possible.
If you have income, cash, or savings, we recommend that you at least make a minimum credit card payment.
As you have experienced, the penalties and interest for late or non-payment are very high. Interest alone can exceed 42% per annum.
In addition to the cost, interest charged on the amount not cleared and late payment penalties accrue, interest will be charged not only on the amount originally charged to the card, but also on the fine and previous month’s interest.
You will soon find that your debt is increasing.
Can I use a personal loan to pay off my credit card debt if I don’t have savings to use?
By consolidating your debt in this way, you can save a lot of money on fines and interest. Or, ideally, do you have family or friends who can borrow money at low interest rates?
Credit card protection programs are useless in this situation. They usually provide compensation if unemployment prevents them from paying.
If your email is consistently ignored by customer service regarding access to your cryptocurrency assets, you should escalate the issue.
Is there a formal complaints process outlined on the platform? If so, please follow the steps outlined there.
The next step is to lodge a complaint with the regulator with which the platform is registered. If there is any suspicion of fraud, this will be a matter for law enforcement in the jurisdiction in which the platform is registered.
The Debt Panel is a weekly column that helps readers deal with debt more effectively. If you have any questions for the panel, email@example.com
Updated: Oct 26, 2022, 5:00 AM