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Opinion on Cavirtex: Good Or Bad

CoinGuyCoinGuy Administrator
edited August 2014 in Buying/Selling Bitcoins
This discussion was created from comments split from: You can now deposit to CAVIRTEX with Interac Online!.

As we were going way off topic, I thought it best we take this to a dedicated thread.
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Comments

  • I am not sure the source of hate for Cavirtex
    In that case, it would be my pleasure to enlighten you. To keep things orderly, I have created a list.

    1. When CAVIRTEX was new and trying to gain a foothold in the marketplace, they listed their company on Havelock Investments. They collected over 400 bitcoins from investors who were buying shares in the company. CAVIRTEX then abruptly delisted the company from Havelock, stealing all of the coins and promising to issue worthless, illiquid, pieces of paper to stock holders. Nearly one year later, some investors have yet to receive their worthless piece of paper. Those who did receive it are unable to trade it for cash or coins because CAVIRTEX is no longer traded on a public market. At the time of delisting, CAVIRTEX managed to steal $500,000 (based on the value of the coins at the time).

    2. CAVIRTEX has a policy of accepting deposits and then holding the funds ransom until additional documentation is provided. A friend of mine deposited a few thousand dollars, after being verified, and was then told that he needed to provide a letter from his bank. He was informed that until he did so, his funds would be held hostage. There are hundreds of instances where this has occurred. Read Bitcointalk or reddit to learn more.

    3. CAVIRTEX steals funds from you if you leave them in your account. If you forget to log in for a while, they steal $50 per month from you. That's $600 per year!

    4. Until they had competition they exploited Canadians by charging 3% fees. They continue to charge the highest fees in the industry at their 10% fee ATMs.

    5. They are the only exchange that will not allow you to get verified with a passport. According to them a passport isn't a valid identity document?

    6. If you travel outside of Canada and log into your CAVIRTEX account, they steal your coins. They have done this multiple times, and to protect themselves legally, they have even included it in their terms of service.

    "As per our terms of service, we only service Canadian Citizens. If you deposit BTC from outside of Canada, you will NOT be able to withdraw them until you are level 1 Verified or higher. Failure to get level 1 verified or higher will result in the FORFEITURE OF YOUR COINS!!!"

    There are numerous posts where people have had their accounts frozen while on vacation, and then were required to divulge private information to recover their funds.

    7. In the senate hearing they encouraged the government to impose strict Bitcoin regulations to prevent new competition.

    8. They refuse to provide financial statements to their "shareholders" despite promising this numerous times.

    9. They promised dividends, and failed to come through on this too.

    10. They refuse to undergo any form of audit or proof of reserves.

    I could probably go on and on, but I'll stop here.
    Personally I want to encourage all Bitcoin business, because choice is good. Some may do it better, faster, cheaper, smarter, but let's try to be constructive, rather than tearing people or companies down.
    Choice is good, but promoting thieves like this is hardly good for the Bitcoin community. How do you think it looks when an innocent Bitcoin noobie tries to buy some bitcoin and then finds out that their funds are held hostage for at least 14 days, and possibly longer if CAVIRTEX feels like it.

    If a company makes a few small mistakes, constructive criticism is warranted. If a company steals 400 bitcoins from their investors, rips off their clients, freezes client funds, and then tells everyone that they are good for the community, pitchforks are a more reasonable response.
  • @CoinGuy‌ My comments were not meant as hateful and yes I read the release. I just wanted clarification because holding funds for 14 days seems a bit ridiculous, and I wanted to see if I was missing something. They also did not mention if this was the case if verified, so I wanted to ask that. Also they state it takes 1-5 days to clear.. Interac should be instant or at least only a couple hours.

    I too have had some issues with CAvirtex.. However I am not a troll and I choose not to discuss them here.

    The only reason this interested me in the first place was often the buy price on CAvirtex is lower then the other exchanges, but this is opportunistic, and would require instant funding and instant release of funds. Both of these are not implemented in the CAvirtex system yet, and I am not sure who will want to be their test subjects until they lift this hold.

    The only way in my opinion to fully test the system is to go all in.

    I do commend them for trying to improve their business by offering more funding options. Anything which brings new users is always a positive. :D
  • CoinGuyCoinGuy Administrator
    edited August 2014
    @dastuff, no worries I did not take your comments as hateful. That is a fair question with more detail. I read it as being the case for new customers so they were not frauded. I would send an email to @cavirtex, or maybe they can answer your specific question here or via PM.

    As for issues with cavirtex, like with any business, I can only evaluate them on my dealings. Have I had issues? Certainly, but I also recognize (especially working at many startups) not everything is perfect. I have had issues with most of the exchanges I have dealt with, from identification to simply using their site. Nothing will be perfect from the start. I think as time goes on, these companies will get better.


    I also like to address what @Rebecca has written. Obviously she has a stake in this more than she is letting on, possibly she was an early shareholder. The reader should consider some things she has written, but I would also like you to consider this too:

    2) Why would you deposit before being verified? It would be common sense to do this first. That's not stealing money.

    3) Banks charge for inactive accounts, and I agree they should make it clearer. I don't like this policy. This is their policy " If you have not executed a trade with your VirtEx account for more than 1 year your account will be considered inactive." I never carry a balance and I recommend you do the same.

    4)Their fees are high, but I don't blame them. It's business 101 to charge more when you have a monopoly (Ask anyone using Videotron in Quebec, before Bell came in). They are in the business of making profit not altruism. There is competition now, so you are free not to use them. However, if it were not for them at the beginning I would never had a stable place to get my first bits.

    5): "According to them a passport isn't a valid identity document?" They don't offer Passport as an option for verification on the account verification page. It is true they state: "We do NOT accept passports or provincial health cards". Frankly, I am not comfortable in scanning my passport to any company, so is this bad? I am sure they have their reason. At the same time, they do accept Passports for debit cards: https://www.cavirtex.com/faq#wverified

    6) I know someone who had that issue. Cavirtex considers it a security measure. I have not heard of an issue recently, so maybe this has gotten better. The best solution would be a warning before you deposit money. Is it ideal, no? But Cavirtex is not a wallet or a bank, it's an exchange. I would use Coinkite or Blockchain.info as a hot-wallet instead.

    7) There is still division in the community on this, but I think it's naive to think Bitcoin will be
    unregulated. They are not the only company working with regulators. I am not saying I agree with their stance, but who can blame them.

    10) An audit is something I agree would be a good idea and should be done.

    As 1,8 & 9 I can't make a comments, because I don't have the facts. These are questions that I hope we can get answers to from Cavirtex or others.

    In terms of complaints, we have almost 3,000 members here and I have seen a couple of complaints about Cavirtex. This will happen with any business. I cannot speak to complaints on Reddit or Bitcointalk, so I will not attempt to. I know people who have had issues with Cavirtex and because of this community, did have them resolved. People with issues on Reddit or Bitcointalk came to this community and got results because this place tends not to be as toxic.

    That is my point about being constructive. I see this place as somewhere for discussion and as an opportunity to have dialogue between users and companies of the Bitcoin ecosystem in Canada. I would love @cavirtex to enter the conversation, but I think we need to be open and respectful for that to happen. Why not ask why certain policies are in place. There might be some logic or use case for that reason. In other cases, taking money from inactive accounts seems unfair, but lets work to get that changed.

    If we attack a business, they are likely to skip having a discussion in public here. I would like us to be open so we can help any business in Canada wanting to get into Bitcoin and be better. As a long time creator, user and administrator of communities, this place can be very powerful for all of us, if we use it properly.

    **I edited this post, to provide some things to think about**
  • MikeXBTMikeXBT Member Plus
    edited August 2014
    The only reason this interested me in the first place was often the buy price on CAvirtex is lower then the other exchanges, but this is opportunistic, and would require instant funding and instant release of funds.
    I generally have funds sitting on the major exchanges, and have also noticed these arb opportunities. However, if you will factor in their commission and the actual market depth, you will generally find that such arb opportunities are very few and far between. For example: There is currently a $4/coin arb opportunity between Virtex and VoS. After fees, this should be negated. Looking at market depth, i would only be able to move over 0.2 coins.

    Rebecca: *lists numerous issues*
    DaStuff: I too have had some issues with CAvirtex.. However I am not a troll and I choose not to discuss them here.
    CoinGuy: Have I had issues? Certainly.

    Perhaps if we can get some people who haven’t had issues with Virtex posting, this would look like less of an attack.
  • CoinGuyCoinGuy Administrator
    edited August 2014
    @mikexbt, my issues were early on when the price skyrocketed and it took time to get verified. They also pulled payza without warning. I have never had money frozen, but I had dealt with slow customer service. This is usually normal in a small company, growing fast. I guess I am more forgiving. But I have had issues with other exchanges too. So it's not fair to only dump on Cavirtex, but considering you asked, I thought I would share. Overall, though, Cavirtex has been ok for me. Right now, I have no issues, and have none for a while. I don't have any qualms recommending them, VOS or Quadrigacx.
  • I'd like to know more about the 400BTC Havelock thingamajiggy.
  • CoinGuyCoinGuy Administrator
    edited August 2014
    @MatchMaker‌ Here is a link to their delisting. Most of info around this is on Bitcointalk. It seems to also be a Havelock issue as much as a Virtex one.

    Not sure where it stands today. In reading most of it, my take is they made mistakes early on. They owe an explanation to investors, but I am not in a position to say they have or haven't given one fully. It's true no dividend has been paid from what I can tell - because they could not afford to. They did survive somehow when all banks were shutting them down, and I am sure other exchanges benefitted from watching Cavirtex errors. Do people who invested have a right to be angry? Of course. It would be nice to get more info from an unbiased source. The only info I found online was share certificates were sent to investors in April or May. Not sure where things stand today.

    At the end of the day, you have the choice to use other exchanges, but as it stands now I don't think I need to warn people away from Cavirtex anymore than I would warn people using VOS or any exchange. Use common sense. Don't treat an exchange as a wallet or a place to store cash or your BTC. As much as some don't want regulation, it's needed as now the only protection is the goodwill, the threat of public embarrassment online and possible legal action ( but ask the Mt.Gox victims how that's going) toward any Bitcoin business.
  • CoinGuyCoinGuy Administrator
    edited August 2014
    Just found this comment on Bitcointalk just now in my research
    Has anyone else received a buyback offer for Cavirtex shares from Joseph David, the CEO?

    The buy back offer is for CAD$0.40 or 0.00070052 BTC per share (the equivalent of CAD$40 or 0.070052 BTC per unit as then listed on Havelock)

    The offer expires Sept 25th, 2014.
    If true that is pretty shitty. No profit. Loss of opportunity that $40 would be worth tons more now if bought straight Bitcoins. Like I said before I am not a Cavirtex apologist, and I can readily accept when they do bad things. In this case, if this offer is true, it is a slap in the face.
  • testmantestman Member Plus
    edited August 2014
    @coinguy. Thanks for creating this thread and to @rebecca for sharing her insight. My experience with Cavirtex has been okay, but since the start of the year, I almost always use VoS. The main reason I switched, was related to fees. I too never had any issues with Cavirtex except the slow customer service. Would I recommend Cavirtex? Sure, they are great if you need big volume, but there are better/cheaper alternatives in Canada for smaller or Noobies to Bitcoin. Quadrigacx, for example, looks to be interesting with the ability to get Bitcoins for gold (and vice versa).
    I am he as you are he as you are me, and we are all together. See how they run like pigs from a gun, see how they fly.
  • CoinGuyCoinGuy Administrator
    edited August 2014
    @testman I think @rebecca deserves most of the complement for starting this thread, even if it came about in a round about way. I think threads like this are important.

    My main concern is to keep things civil so that @cavirtex can join in the conversation, should they chose to do so, without being attacked outright.

    Nevertheless, the recent comment about the treatment of shareholders brings me closer to @rebecca, in my concern for them as a business. If that memo is true, I can see how Cavirtex could draw ire of early investors or those who were affected. I would live to hear from investors about this.

    At the same time, mistakes made with investors does not mean @cavirtex is a bad business or people need to avoid it. It's just something to be aware of.

    Like I said, I have used them since 2013 and while I had issues in the past, I have had none since the start of 2014. I guess it's a case of YMMV. Are they my first choice? Not as they once were, but I have no issue in recommending them as an option.

    I should add, I know Kyle @cavirtex is trying to make things better. You can read a bit more about that in Reddit: http://www.reddit.com/r/Bitcoin/comments/27e3ec/dear_reddit_can_we_talk_its_cavirtex/

    Hopefully we can have a frank and respectful discussion here too.
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