“Worse than the FBI and the US Internal Revenue Service combined.” This is the criticism of users who, when trying to operate with bitcoin on the centralized exchange Coinbase, find a series of requirements and requests that are more reminiscent of a bank than a cryptocurrency exchange.
Via Twitter, Mira Christanto, who is a researcher at the market analysis firm Messari, reproached that due to the update of Coinbase’s ‘know your customer’ (KYC) policies, states are now being requested bank account of at least three months ago. It is also asked to explain when it began to trade with cryptocurrencies and, even, how much profit has been accumulated as a result of that.
Quite excessive. Regulated entities may want only a bank statement, no proof of funds is required, there is no explanation as to when you entered the crypto market or how your wealth has increased as a result. It is not necessary to add how many other passports you have (if any) in addition to the ID you are sending.
Mira Christanto, researcher at market analysis firm Messari.
He also shared an image where several of the requirements demanded by Coinbase to start using the platform are read . The requests range from giving details about the current (and past) occupation, salary certificates, to informing if there are cryptocurrencies in other digital wallets .
But it’s true?
To confirm the information, CriptoNoticias searched between the privacy policies and terms of the company. We achieve that, among the personal information requested, is the one that has to do with the financial part, in the Privacy section of the official website of the exchange .
There, they admit that bank information is requested, such as bank name, account type, routing number, account number itself, and transaction history .
According clarify, the company will request such data “only to the extent necessary to comply with its legal or contractual obligations.” In addition, they maintain that they are subject to the US Bank Secrecy Act (BSA).
In addition, they talk about requesting names, dates of birth, nationality, sex, utility bills, photographs, phone numbers, ID, passports, driver’s licenses (with their details). They also request other information necessary to comply with their legal obligations “under financial laws or against money laundering.”
Even, They ask to inform about the transactions that are carried out in the exchange’s services , such as the name of the recipient, the name of the sender and the amount.
Although they do not clarify that everything is part of the requirements of KYC, much of the information displayed by Christanto is validated on the same Coinbase website .
Harsh criticism in networks
Christanto wasn’t the only one to criticize Coinbase’s new KYC. On Twitter, several users shared their discomfort with the new process and classified it as excessive, since it can take up to three days, when before it was completed in few minutes .
One user claimed that Coinbase, one of the publicly traded exchanges, caused retail to be influenced by the FOMO (Fear Of Missing Out or fear of being left out), which led to the creation of new accounts, which, now, cannot trade with other people due to the KYC requirements .
Another person questioned the exchange: “Either it is the most irresponsible KYC exchange on the planet, by not enabling load balancing servers, or is it deliberately doing it on purpose, to prevent people from they liquidate their profits. ”
Another went further and recommended to move away from Coinbase and other centralized exchanges , such as Binance and Kraken, as they“ will be hacked or they will deliver the da cough at one point. “KYC is evil and should be avoided,” he coined.
Big moves from Coinbase
After Coinbase’s conditioning to continue operating became viral, large sums of bitcoin have been mobilized from that exchange to other unknown wallets, according to what the Whale monitor reports Alert on Twitter.
For example, at 5 pm (UTC) this Friday, a transfer of 5,500 BTC was recorded, or USD 347,122,129, from Coinbase to an unregistered wallet.
In another movement, 938 bitcoins , or USD 58,368,151, transferred from that wallet to Binance. Others 415 BTC , or just over USD 25 million, were taken from Coinbase to an unknown wallet.
And today, others 1,699 BTC (USD 103,273,476) were moved from Coinbase to an unknown wallet, as another evidence of a migration, perhaps fortuitous, to other exchanges that do not have so many KYC requests .
Beware of hackers
The KYC update on Coinbase, which involves giving sensitive information to a company, may be a double-edged sword , especially because of the hacking history that the exchange has reported.
In fact, the last one was at the beginning of the month, when Coinbase suffered an attack, the product of a failure in the authentication system, and that collected the cryptocurrencies of at least 6,000 users , as reported by this newspaper.
Although the company reported that it was replenishing the stolen funds , the truth is that the security of the exchange house was compromised, therefore, beyond to update the KYC, there should be a reinforcement in the capacity of the company to stop this s attacks .
