Topic: Centralized Exchanges already violate customers privacy right by asking for KYC (Read 140 times)

Thy one no be better one because definitely I see no reason why centralized exchanges wey no Dey registered for the country go Dey demand for KYC intentionally from their customers and that’s totally wrong but on the long wrong, I think say, maybe those exchanges don already the sense wetin go happen for future na e make them Dey collect those KYC but all those ones definitely no be any better excuse to Dey collect people details when them no Dey licensed for the country.

I no blame the exchange but rather we citizens because we no Dey ever take anything serious and this news na another wake up call for us to take our privacy very serious

It’s because they want to obey the international anti money laundering complaints. KYC is just the basic for AML regulations. For an exchange asking for this KYC protocol actually allows them to reduce unwanted transactions in the exchange. For example if a criminal fails to provide a valid KYC detail then they know from a start that such customer is not to be allowed to get access to large amounts of trading volume. Should a customer uses any of this exchanges for money laundering and found guilty, then if the exchange used fails to provide the information before the court then the exchange bears the crime.

Look at P2P, if they do not have the KYC of the customers it will be hard to actually get hold of a vendor if they use the exchange to carry out any crime.

Exchanges are under the international law of AML to ask for KYC of any customer using their exchange. The country law is just secondary

Most exchanges dey outsource KYC/AML to KYC service providers and those providers most times dey operate based on international law requirements. But na very good point you make since they're not licensed by our government. I didn't of it like that. But here's another twist to it — top crypto gambling platforms like stake, BcGame, etc also require KYC under certain conditions. Going by your logic, they need to be authorized by government too? I don't think so.

Is KYC even necessary? Like in a case of fraud or scam can the culprits really be held accountable? There is no way scams and frauds can be avoided totally because I know that the reasons why most platforms that has any financial dealings wants their customers to pass through KYC is for transparency sake of which no matter how transparent you want a system to be, it can only reduce it but cannot be brought to a halt so for me KYC isn't necessary at all regardless of the fact that if there is no KYC the rate of scams might be much but there is something i like about some reputable exchanges like binance, except the seller confirms that he has received the money that has been exchanged, he cannot release the crypto and if he refuses to release the crypto after confirming the transaction, an investigation would be undergone and if it shows that he refused to release the crypto after confirmation, the exchange automatically withdraws the crypto and the account face necessary penalties.

But let the truth be told, those exchanges no try at all because anyhow wey e be them suppose reach consensus with the federal government before Dem go dey collect people information dey use am for their system, abi na Dem register the citizens with those documents wey Dem dey use for KYC? No be Dem na so Dem suppose give Caeser wetin belong to am too so dat this wahala wey dem dey face like this Dem for no face am. Dem for just dey find the government small small peanut Dem for no dey look eye for dis exchanges but as Dem no dey get anything na in make the FG just dey para.

All dis for don dey controlled from onset if for say Naija government put interest for dis cryptocurrency thing as e dey make wave, by now all dos exchanges go dey under their watch and dem go don dey generate plenty revenue on top am. E neva too late now sha, dey only need to follow dem jejely becos even dem too no go wan leave naija at dis stage with d kind traffic wey dem dey generate from users for naija. Dis thing, na just for government to just regularise am o, no be big thins e be sef.

Other big countries don do so, and e work for dem and their citizens dey use am freely. Government no fit ever stop crypto from growing, the only thing na to impose task and na him other countries wey don realise am don dey do. The earlier for dem, the better and make dem stop dey blame the exchanges for the naira fall. Them know better dan us wetin dey fall the naira, make them better rectify am the right way and stop blaming where the blame no dey.

You have very well said it all concerning binance International protocol and users privacy right, although the fact that the kyc is already with the exchange makes it clear that the operates within the international standard for financial services operations although even though the data's can be handed over to the government on special cases the Nigerian government asking for Nigerian p2p trader's information is way out of the right of the exchange and the privacy rights of binance Nigerian users.


None the less also I understand that centralized exchange does not acquire license of any country or own a physical office in any country but request for kyc verification from users which is what trigger my thought to bring up this topic here.

You were there when the Nigerian government as asking government for Nigeria accounts that has traded in p2p in 2022-2023 and Binance refuse, they later asked for top 100 by volume that has used p2p but Binance insisted and they reufesd. If Binance didn't request for KYC, the Nigerian government would have probably charge them more for processing transactions for terrorism, fraud and other form of cyber crime.

What centralized exchanges are doing is that they are trying to follow up the international law regarding anti money laundering, it's not only one government that watches over exchange activities, even international organizations like UN are watching and they can decide the faith of exchanges if found guilty because that's a combination of many countries. They need your kyc to avoid extra charges that may come later in the future.

I don't know if I am very correct about this, but I think there is still opportunity for the government and Binance to form an alliance so they can still get the license of operation, while the Nigerian government earns its tax from Binance services in the country. What's going to determine the success of what I have said is if Binance is still ready to have all their services fully restored in the country (Nigeria), like the P2P that has been suspended. 

Like you said, Boss, Binance is always ready to respect local laws, but the government handles them wrongly. The last pick of that story that I read, I saw that the CEO made a statement that "after the meeting two of its staffs with the Nigerian government had in Abuja in the first week of January, two unknown persons approached those binance officials and asked them to make a huge amount of payment so that the allegations against them could be removed, but the staffs declined, owning to the fact that before that will be done, it must be legal and on a written agreement. 

I must say that they have blown this up, but they can still do the right thing. 

Yes, eh dey true say these exchanges may not have been legally registered to commerce operation within our jurisdiction, but you and me know say there might have been a backyard illegally registration so as to enable them have access to our national data base, such as the BVN and NIN, because if they weren't, how come were they able to identify which BVN is correct or fake..  So in regards to this, wetin I dey perceive be say maybe our government dey try delist NGN from all exchanges, and then present it to whichever exchange willing to pay the highest tax price to our government. Because we all know say all these kasala we dey experience for the past few days na money dey cause am, of which if our government see better money from these exchanges,  I'm sure them go mellow down.

Because all this problem we dey experience today all started after our government officials got a clue how much Binance generated from our country last year, and how much may have been generating yearly.

Binance Nigeria Moved $26B Worth of Untraceable Funds in 2023, Central Bank Chief Says: Reports

I agree with you on this that Nigeria government wants to be US, and this is the problem that is killing us in Nigeria, we are copy cat, and we don't know how to go about what we are copying because it was not our initiative.

This is why the government have failed in so many areas, because this is Nigeria and not USA. Instead of Nigeria government to think properly about the outcome of whatever action they want to take, and see if the negative effect will be bigger than the positive side, they will not, but they will rush to copy what the US is doing.

This is the reason why democracy is not working in Nigeria because it is was done based on the second world scenario playing out over there in their country. Nigeria adopted it and nothing is working because it was never our practice from onset. Them copy US, when them no even get any idea to go about making Binance to pay them.

You don't give license by illegally detaining employees of a company or project, it was the job of the SEC NG to summon Binance and to get them licensed and get service tax in return.
Binance are always open to respecting local laws, it's boldly written in their terms and conditions.

The Nigerian government wanted to be US so badly but took the wrong approach and now they have nothing left..

I think it has been a policy of those CEX that are operating in Nigeria to request KYC because it is part of their terms and conditions as a company to ask for KYC no matter what country they are offering service to. Consequently, they have to bear the result they get from the Nigerian government because it was never right to start operations without a license. Although the action of the government is going to be effective for those Nigerian citizens who carry out their daily business via P2P transactions,.

Anyways, awaiting how it's going to end for those CEX, they might still acquire a license later from the government in order to start their operations again, and I am sure that Nigeria will grant them a license hoping to also get their benefit from there. 

Let me say you have a point there but at the same time, the centralised exchanges have every right to demand for the KYC to satisfy the world's AML campaign regardless of whether or not they are registered in your country. The registration is not a basis but the lawfulness of the establishment, and I tell you today, you will never see a standard establishment that will not ask you for the KYC, they might only delay it but they will eventually ask you.

They do this not only to help the law and the AML campaign but to also save their heads. Who knows, whether it's their jurisdiction or not, any case linked to them may be launched and Interpol or other international bodies may scrutinize them about the KYC and their activities regarding a certain person(s) of interest. It will be a blow to their face if found guilty which could attract a huge sanction or worse (jail term) if they are unable to provide the KYC. Fine, our country may not have a direct say here, but your money with them means they are dealing with you financial, so they are obliged by international law to have all the records about you as much as possible.

This is not peculiar to exchanges alone, I've dealt with more than 50 international companies that demanded me to identify myself by all means necessary. Despite almost all of them not having a presence in my country, they still demanded it since it is required of them unless they are not registered and operate in any country at all, and unless they are not a standard and recognised establishment. If they are and still do not ask for the KYC, it will not be long before the long hand of the law will reach out against them.

You have given an accurate answer here because licensed or not doesn't deprive a platform to perform KYC on their customers because KYC is also what gives their customers the benefit of doubt that they are not some kind of scam site and boost customer's confidence to know that their personal information is in their database in a case of fraud or scam, it can be traceable more especially if it involves a huge fraud. However centralized exchanges can still be traced by the government if they want to, though it still requires some kind of authorization by the government to collate the information of the citizens of a country that are using their platform so that they don't infringe the privacy of those individuals without the government knowing after all it's the government that have the data of the various documents and personal information used to undergo KYC. This will also help in a case of forging KYC documents the government can step in and do an authentic verification.

Obviously, I believe why centralised exchange demand for KYC at first is to maintain government regulations as agreed by both parties because every entity can not operate in a region without recognising the government laws of that region

However, KYC was initiated for security purposes whereby an account holder might be requested to present their KYC if any suspicious activity goes on with the account. Possibly a change of IP address when withdrawal of funds or assets. This is done for the safety of the account holder and the exchange because no one party would be ready to lose such an amount of money if it be in the high side.

Nevertheless, KYC is not a compulsory thing that one must do, if as an individual who does not really align with the KYC policy, it is left for you to decide or make your choice where to register. There are lot's of exchange out there that do not require KYC for registration one can register with them or better still use decentralised exchange for your transactions if any offers p2p.

If you ask me, I'd say the basic need for the KYC in an exchange is for security purposes. The DEX has always planned long term goal ahead of the future which theory can never be gone to extinction. While saying this, there's an early view from the SEC that some individuals would take chances to laundering monies using the crypto currencies.
Obviously since cryptocurrencies has been a decentralized non custodian digital assets, it would feel safe for persons to succeedingly launder money illegal through the developed technology and to bridge that fact by having all transactions on tracks, comes where the application of the KYC came through so that every course of exchange transactions can be traceable to indict perpetrators using the medium of the crypto exchange to execute their criminal acts.

Although considering some tenses about this security factors in using the KYC without and official issued licenses, it's a disregard for such a government like that of Nigeria.
I also think that if proper measures are being taken towards the CEX in the sense that the government at some limits follow up citizens using the CEX to executive transactions, the government can as much come in to play the roles of protecting the national interests also as much, the SEC as well could also take its bone of action to protect the reputations of the CEX and Cryptocurrencies as a whole by bringing every perpetrators to book.
The KYC would actually help to build this large and solid security firm.
Being aware about the senate concerning the regulation of Cryptocurrency held recently in Ekiti state, one Sen Biodun expressed that the hash actions the federal government is taking upon the Crypto by the restrictions may not be the solution to how the government think it'd be, while considering the impacts of crypto potentials in the society, restrictions would do it no good. Maybe they as the federal government can play some crucial role of management. https://twitter.com/PulseNigeria247/status/1359869126785785858?t=c3DsAIpyy4fUF6pOTZQbtA&s=19.

Let's also checkout one Mr Cartier with the attempt to money laundering using the USDT and other fiats with the crypto CEX but unfortunate for him that he was caught. https://crypto.news/heir-to-cartier-empire-arrested-for-attempted-money-laundering-using-usdt/.
This is a visual power of the impact of the KYCs.
I don't know how many of us can categorically bet on trusting the Nigerian federal government that the masses welfares is their priorities and not having all these Interests on the cryptocurrencies for their Interests while the local crypto Investors and traders like us would be suffocated.

No doubt this is a concern for those who love to maintain anonymity in the crypto space but let me put hit straight to you that all you have mentioned has no connection with the issues of Nigerian government attacking cryptocurrency in the country. Its obvious that our leaders are concerned about money laundering, finance terrorism and instability in the price of Naira to USD. And that is why these Centralization focuses on security which is the main reason why they see KYC as a step forward to increases security and also catch fraudsters in the space. There have been lots of account suspected by Centralized exchange of which they suspect money laundering and theft. Yet the Government are blind to have seen how these exchanges are putting effort. Dont you think that removing KYC in CEX will cause more harm than good? In the right sense how those anonymity in CEX would increase security and prevent illegal activities? think about it!

But we know say government no even look that side, them just focus on bringing down naira P2P by blocking it off the exchange. Naija government never worry of exchange submitting of KYC but dem only dey pursue about naira.


I no think say the KYC na for only Nigeria people the KYC dey require. If you want get account for such exchanges then dem go ask you to go through their KYC by providing documents or credentials. So na general thing and no be say dem dey single only Nigeria out for KYC.

Doesn't matter what jurisdiction you're operating, the AML act must be implemented if you're running a financial institution unless you want to run a Non-KYC platform( less safer) . KYC protects both the institutions and the customers from fraud and money laundering.

KYC on CEX is Sacrosanct; it's a first step towards playing safe and keeping records for the government. KYC protects you from being leaked to dirty criminal Money since it's almost impossible to launder money.

If you open an online store do you go about looking for license from each country before you sell to them? No, it's their duty to come to you with their local regulations and tax procedures and if you don't like it, you stop your services to their local. Simple.

My people I say make I bring this one to our notice sake of say, many things dey happen for the naija cryptocurrency space lately were demand our alertness and questioning on how thing the go before now.

No doubt gov recent activities to take down centralized exchange that engaged in naira trading when theor are not licensed to deal such deal or even have any government certificate to under take such services.

If you look well well, to some extent the government fit get a point oooo, sake of say why the exchanges go dey ask customers to submit their documents and go through kyc when their know that their are not authorised by government to do so since their don't have licensed to operate it make them become Lord over their own system when then their self no follow thr right principles to operate such a service within the jurisdictions.

So make we chuck mount for the big yan we're be say!

Why exchange go collect kyc from customers in Nigeria when their are not licensed by government?

Waiten them dey use the kyc documents for and who authorised centralized exchange to do kyc for their customers when the don't have licensed which AML are their trying to protect?