Pax

DeFi blog Rekt claims that FTX failed to adhere to its own terms and conditions by imposing the fee.

A crypto hodler is outraged after allegedly copping a $954,135 fee from centralized exchange FTX. The trader claims the fee was charged over a mistaken deposit they believe was the exchange’s fault.

On Oct. 6, the Rekt Blog published screenshots of correspondence that suggest the problems began when the customer deposited around $6.3 million in USDP, the stablecoin token for DeFi borrowing platform Unit Protocol, in late September.

Unfortunately, the Paxos stablecoin has also rebranded to USDP and the exchange changed the PAX ticker to USDP in late August. So the user apparently deposited $6.3 million of unsupported USDP tokens into the exchange’s address for the Paxos stablecoin.

This is a customer service announcement.

Will FTX please comply with their own terms and conditions?

An unhappy @ftx_app user came to us for help after they were overcharged ~$954,135 in fees.

Is this how @SBF_FTX got into @Forbes?https://t.co/DJ1jnxaBh6

— rekt (@RektHQ) October 6, 2021

FTX compensated the user for the mistaken deposit by returning around $5.4 million in stablecoins but deducted a 15% fee. The disgruntled user fired back:

“You have deducted more than $1m off my initial deposit amount. This does not align to your "Wrong Address or Chain" policy. I did not deliberately deposit USDP to your FTX exchange, I was misled. I wish to appeal please.”

Rekt reported that FTX did not abide by its own terms and conditions which state a fee up to 5% will be charged in such circumstances.

However, when Cointelegraph checked, the conditions currently state that a minimum of 5% may be levied if the exchange has to recover deposits to incorrect addresses.

Related: FTX smashes crypto funding record with $900M raise to become exchange decacorn

Rekt said it had verified the deposits on the blockchain and contacted FTX for comment but had not received a response. It called on the exchange to rectify the problem.

“As decentralized exchanges grow in popularity, trust becomes the most valuable feature that a CEX can offer. In this case, FTX has broken that trust, and they must now take action to fix it.”

The claims were also posted on the FTX Official subreddit but had been deleted late last month. One respondent to Rekt's tweet claimed he had posted the blog in the FTX Telegram group and got banned instantly.

Cointelegraph has contacted FTX for comment. There had been no response at the time of writing.