[colechristensen]

The business of payment processing is actually the business of managing fraud, and everybody tries to lower costs as they grow and age.

Unless there’s specific external regulation, there’s a regression towards being awful.

[kylecordes]

I wonder if providers like this could offer an option to pay some chunk of money that would cover the cost of a thorough background check and human review of all aspects of your business. They would then be able to trust you enough to not freeze anything without future human intervention.

[colechristensen]

Heh, maybe a regulation saying you couldn’t hold money hostage like this if the business is SOC 2 compliant

[KptMarchewa]

I would guess AML, not fraud.

[maxbond]

I think they're saying there's an inherent ponzenomics to payment processing, wherein the might use AML as an excuse to paper over a lack of liquidity by stalling withdrawals. Lots of cryptoasset exchanges will freeze withdrawals over fictitious security or AML concerns when they're going under, for instance.

[ycombobreaker]

AML regulations are real, though. Crypto exchanges' fictitious claims wouldn't fool anybody if it wasn't already "a thing" in the more-regulated side of the world.

[KptMarchewa]

I haven't seen real example of this in real money financial institutions. Haven't followed crypto exchanges though.

[maxbond]

I'll add that I'm also not aware of something like this happening outside of crypto exchanges & don't actually hold an opinion on this hypothesis, as I'm not familiar enough with payment processors to know one way or the other. My comment makes me sound like I support this hypothesis, but that's a mistake in my wording.