This article aims to inform users about the reasons behind Uphold's conversion of specific ERC-20 tokens into ETH and suggests ways to minimize the risks associated with withdrawing funds to Ledger.
Planning on withdrawing funds from Uphold to Ledger?
Trying sending a test transaction first. It might cost you a bit in the short term but will be worthwhile to prevent larger losses in the long term.
What's Uphold?
As the cryptocurrency market continues to grow and evolve, there are more options than ever before for buying and holding different types of digital assets. One platform that has gained a lot of attention in recent years is Uphold, which offers users the ability to buy, sell, and hold a wide variety of cryptocurrencies.
The issue
One issue that users have reported with Uphold is the platform's tendency to automatically convert certain ERC-20 tokens into ETH. This can be confusing for users who are not familiar with the platform's tier system for categorizing different cryptos.
According to Uphold's transparency page, the platform has six different tiers for categorizing different types of cryptocurrencies. Tier 1 is reserved for currencies like BTC and ETH, while Tier 6 is for "other cryptocurrencies" that are not currently supported for withdrawals.
The workaround
It is recommended to convert any crypto that can't be withdrawn (i.e. Tier 4, 5, or 6) to a Tier 3 crypto, which is supported for withdrawal. This means that if you want to withdraw a Tier 4, 5, or 6 crypto like SHIB, you will likely receive ETH instead.
While Uphold does inform users of this conversion during the withdrawal process, it may not be immediately apparent what is happening unless you're an experienced user. Some exchanges have unique ways of handling transactions, and Uphold is no exception.
Conclusion
In summary, Uphold's automatic conversion of certain ERC-20 tokens into ETH can be confusing for some users, but it's important to understand the platform's tier system and withdrawal options in order to avoid potential issues. By doing a test or small transaction before sending a large amount of funds to a Ledger wallet, you can ensure that you're fully aware of any conversions or changes that may occur during the process. Feel free to reach out to Uphold customer support with any questions about their policy.