Why is KYC mandatory in CEX? - page 4.

abel1337

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Quote from: gunhell16 on September 07, 2023, 07:59:00 AM

Quote from: Altcoiner007 on September 05, 2023, 05:51:54 AM

Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?

In a regulated exchange, it is normal for the platform to ask for KYC from prospective clients. Of course, they are under government regulation, which is why they can legally operate. It is also up to us whether we want to submit or not.

The exchange does not force us to do this, as long as if we want to use their platform, we must also follow the rules it has, and it may also be one of the security measures for our account using their platform. But if it's a decentralized platform exchange, we don't need to submit KYC. just as simple as that anyway.

It's just sad that there's a heavy limit on centralized exchange customer that don't submit their KYC even if it's not mandatory. The law are the one who keeps binding exchange to collect KYC, it is a different thing if we talk about decentralized exchange. Your account is your own wallet, you don't need to prove that.

At the end of the day it is always our choice if we want the convenience with KYC or the cons of using decentralized exchange.

cafter

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Quote from: Altcoiner007 on September 05, 2023, 05:51:54 AM

Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?

because they have to follow rules set by governments to prevent illegal activities like money laundering and fraud. KYC helps the exchange verify who you are and reduces risks. It also lets the exchange work with banks and offer better customer support.
some users may not like it, KYC is seen as necessary to keep the exchange safe and follow the laws.
not all exchanges have the same rules, so you can choose one that follow your privacy preferences.

money laundering can be done through stolen identity but it's hard to do 3rd level KYC which maybe applicable for transacting big amount.

gunhell16

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Quote from: Altcoiner007 on September 05, 2023, 05:51:54 AM

Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?

In a regulated exchange, it is normal for the platform to ask for KYC from prospective clients. Of course, they are under government regulation, which is why they can legally operate. It is also up to us whether we want to submit or not.

The exchange does not force us to do this, as long as if we want to use their platform, we must also follow the rules it has, and it may also be one of the security measures for our account using their platform. But if it's a decentralized platform exchange, we don't need to submit KYC. just as simple as that anyway.

dlightag

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The exchange want to know they customer in process of (KYC) simply means know your customer, by so doing that the exchange as well know the actual active users of the exchange in other words to limit money laundering in the exchange and also stopped multiple users in the exchange platform, like wise not participate airdrop with a multiple accounts, one user, one entry point.

Despairo

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Quote from: MusaMohamed on September 07, 2023, 03:57:55 AM

If money laundering is doing professionally, KYC is not enough because those guys have many tools to use stolen documents and submit KYC.

Governments and exchanges can use ChipMixer as their example that KYC is helpful, not useless, for them. They got the guy behind ChipMixer by KYC but it is useless and dangerous for people who don't care to do money laundering. They can not trust exchanges, governments to protect their privacy after KYC.

Why KYC is extremely dangerous – and useless

Lol.

I suggest you to read the thread you took before creating post, you're contradict with the thread was talking about. You said if KYC is helpful and it can be used to fight against money laundering, while the thread was pointed about if KYC is useless and it help the criminal to stay undetected, which is same what I pointed in my post.

Quote from: 1miau on January 28, 2020, 05:40:11 PM

Conclusion: KYC is useless

The primary result of this evaluation is apparent: KYC is not only useless but ultimately encourages what it is supposed to prevent. KYC creates new areas of crime (identity trading of real users) and boosts existing areas of crime (criminals can now go undetected by abusing the identities of innocent users). It also blatantly endangers the privacy and security of all customers.

Therefore, the advertised effectiveness of digital KYC in crypto unfortunately exists only in theory. The community would be better off acknowledging the fact that not only KYC is useless, but it is also dangerous and promotes crime. Since documents for KYC are sold illegally on the web or are even faked by artificial intelligence, KYC doesn’t actually prove anything anymore.

In fact, KYC is encouraging scams and crime as well as endangering the privacy and safety of all customers through identity theft. This creates a dangerous dynamic for users who are forced to perform a KYC check: tons of personal documents are being collected by criminals and will likely go public in the future to a degree we have not seen before.

MusaMohamed

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Quote from: Despairo on September 07, 2023, 03:42:06 AM

Asking KYC to prevent money laundering is pointless, what if the money launderer use stolen KYC and successfully laundering the money? what will the centralized exchange do? if they report it to SEC and it mean the SEC will accuse a wrong person since the hacker is using stolen KYC.

Nah, it's worse to complete KYC beforehand, the best is just choose a no KYC P2P or decentralized exchange.

If money laundering is doing professionally, KYC is not enough because those guys have many tools to use stolen documents and submit KYC.

Governments and exchanges can use ChipMixer as their example that KYC is helpful, not useless, for them. They got the guy behind ChipMixer by KYC but it is useless and dangerous for people who don't care to do money laundering. They can not trust exchanges, governments to protect their privacy after KYC.

Why KYC is extremely dangerous – and useless

Despairo

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Quote from: leonair on September 07, 2023, 02:29:13 AM

One of the reasons for making KYC mandatory is to prevent money laundering. Every country has a law and when a CEX does business globally it can do business in those countries as per the laws of those countries and that's why KYC is being made mandatory gradually. Binance made kyc mandatory long ago. A few days ago Kucoin made kyc mandatory. Still exchanges like MEXC, Gate.io allow trade, deposit, withdraw without kyc but very less amount. In future they may also make kyc mandatory. So it is better to complete kyc beforehand

Asking KYC to prevent money laundering is pointless, what if the money launderer use stolen KYC and successfully laundering the money? what will the centralized exchange do? if they report it to SEC and it mean the SEC will accuse a wrong person since the hacker is using stolen KYC.

Nah, it's worse to complete KYC beforehand, the best is just choose a no KYC P2P or decentralized exchange.

Outhue

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Quote from: yazher on September 06, 2023, 01:32:25 PM

Another thing is, when it comes to airdrops the owner of that project has some way to prevent duplicates and one of them is to make their participants do KYC in order to prevent them from getting double rewards or sometimes this is their way to not distribute the rewards for others because in the first place, they tricked their participants and they just implemented these rules in the last minutes when they are about to distribute the rewards for airdrops or bounties.

Yes, in the past many new projects that introduced airdrops end up asking participants to pass KYC before they can get the free coins, but there are few projects that collected KYC information from participants and they still don't give up the free coins and tokens, makes me wonder what they did with the KYC details they took from people.

I was against KYC in the past but not anymore, there is no easier way to get rid of money laundering, and some bad criminal behaviors in the crypto space than using KYC, if there is no KYC the crypto mess would be more than what it is today.

JunaidAzizi

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Quote from: fruktik on September 07, 2023, 12:33:20 AM

I am against the verification of identity on the exchanges. This is a violation of the principles of cryptocurrencies. Why should I do this? In today's world, you should cherish your personal data, and not scatter it. Many cases are already known when they fall into the hands of scammers and very sad consequences come for people. It is better to avoid this in advance.
In addition, I do not often engage in speculative transactions in order to pass an identity check.
There are still those platforms where the principle of anonymity is in the first place, but there are fewer of them every day. Already very strong pressure comes from the financial regulator.

Cryptocurrency was originally designed to be a more anonymous way of transacting money but in recent years there are much unlawful activity has been done and the government pressured the exchange to implement the KYC procedure. Verifying your identity with the exchange is beneficial not only for you but also for others. You will be more likely to trade or exchange funds and the person to whom you want to exchange is also identified to that exchange which will lessen the chances of stealing your money. Of course, there are many pros and cons of KYC, and verifying it or not is your personal opinion. if you are more concerned yo your security then choose the exchange where KYC is mandatory if not then non KYC exchange will be good for privacy purposes

leonair

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Quote from: Rabata on September 07, 2023, 01:33:07 AM

Quote from: Altcoiner007 on September 05, 2023, 05:51:54 AM

Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?

If all users were legit then KYC might not be needed. But that is not possible because there will be some miscreants ‍and for all these reasons KYC has become mandatory. In some countries the issue of KYC mentioned in their regulations. If you want to take any license form the country, it will be mandatory to do KYC. Not just Bitget the most centralized exchanges require KYC. I think all the sites which have not made KYC mandatory yet will gradually make KYC compulsory when the government comes under the restrictions. The ratio of money laundering has increased so much in today's world so if government try to control it then KYC is definitely needed.

One of the reasons for making KYC mandatory is to prevent money laundering. Every country has a law and when a CEX does business globally it can do business in those countries as per the laws of those countries and that's why KYC is being made mandatory gradually. Binance made kyc mandatory long ago. A few days ago Kucoin made kyc mandatory. Still exchanges like MEXC, Gate.io allow trade, deposit, withdraw without kyc but very less amount. In future they may also make kyc mandatory. So it is better to complete kyc beforehand

Rabata

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Quote from: Altcoiner007 on September 05, 2023, 05:51:54 AM

Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?

If all users were legit then KYC might not be needed. But that is not possible because there will be some miscreants ‍and for all these reasons KYC has become mandatory. In some countries the issue of KYC mentioned in their regulations. If you want to take any license form the country, it will be mandatory to do KYC. Not just Bitget the most centralized exchanges require KYC. I think all the sites which have not made KYC mandatory yet will gradually make KYC compulsory when the government comes under the restrictions. The ratio of money laundering has increased so much in today's world so if government try to control it then KYC is definitely needed.

OrangeII

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CEX is a centralized exchange, so they still have full control over what happens there. to minimize the risk of money laundering, and others, CEX requires KYC. Previously, KYC was not mandatory, and there are still many CEXs that can be used even without performing KYC. However, due to government pressure and legal legality, currently most CEXs require KYC. although there are quite a few who challenge this because it is not in accordance with the rules of anonymous crypto, but like it or not they have to comply with the law.

fruktik

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Quote from: DVlog on September 06, 2023, 12:49:51 PM

Governments are concerned about illegal activities through cryptocurrencies. And they think that most of this activity is done through cex like Binance. They have a large user base and their P2P system is widely used all over the world. SEC is targeting these exchanges by saying they are involved with these types of activity. So they do not have any other option but to force their user to do KYC. If someone is not doing anything illegal they shouldn't be afraid of it or if someone thinks they should not share their identity then dex or P2P is the best option.

I am against the verification of identity on the exchanges. This is a violation of the principles of cryptocurrencies. Why should I do this? In today's world, you should cherish your personal data, and not scatter it. Many cases are already known when they fall into the hands of scammers and very sad consequences come for people. It is better to avoid this in advance.
In addition, I do not often engage in speculative transactions in order to pass an identity check.
There are still those platforms where the principle of anonymity is in the first place, but there are fewer of them every day. Already very strong pressure comes from the financial regulator.

MusaMohamed

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Quote from: TravelMug on September 07, 2023, 12:05:06 AM

Yes, they are under regulatory pressures to ask for KYC now, specially after 2017's massive bull run. So they regulation that crypto exchanges will have to follow certain rule if they wanted to operate to let's say in a certain country that has a tight regulation as far as crypto goes.

And so exchanges can't do anything.

They can not do anything is right if government request their exchange to do KYC against customers. However, we don't know exchanges do this because of government request or just borrow it as their reason to do KYC.

Scam exchanges surely borrow this reason but non scam exchanges can do this too. I am fearful how they will store customer data and photos of KYC documents, selfies. Their bad security on data base can leak their customer documents massively.

Quote

Unless we go to DEX, but there is a question of liquidity as well. So there is a trade off, used centralized exchange but there is high liquidity but you have to passed KYC, or DEX, but then it's slow and most of the time very slow process.

Decentralized exchanges have another risk. They can be seized or shutdown by governments and this risk is bigger with decentralized exchanges that are targets of governments. They can not govern DEXs well and they go with alternative regulatory solution, seize or shutdown those DEXs.

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The moment when an Exchange touch Fiat currencies, it has to adhere to local governments rules and regulations. These regulations were introduced to follow the money trail to trace financial crimes and to monitor and control people's finances.

They use money laundering as an excuse and also other financial crimes, but an added benefit for them is the monitoring of people's financial wealth and also to help them with the collecting of taxes. (The money that are paying their salaries) Roll Eyes

TravelMug

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Quote from: AmoreJaz on September 06, 2023, 04:21:52 PM

Quote from: Bananington on September 06, 2023, 04:13:02 PM

If having the knowledge already that CEX is more controlled that a decentralized exchange, it should be clear that it is mandatory to complete a KYC verification on a CEX before transaction in crypto related services is approved.
No need for anonymity in a CEX, so why should completing a KYC be a problem?

The issue I am bothered about is that of not having enough knowledge on a particular CEX platform before registering or completing a KYC verification. This is when ignorant customers fall prey to scammers and hackers.
It is advised to always complete your KYC verification on a certified CEX platform before engaging their service.

the answer is actually pretty simple about the question of the OP. these CEXs are requiring their customers to undergo KYC because they are licensed to implement the AML/KYC policy according to the jurisdiction where they are operating their business. doubt the motive of the site if they are not legally registered and yet, they are requiring KYC from their customers. as these crypto-exchanges are mandated by the Central Bank to implement the AML/KYC protocol, they have no choice but require their customers to submit their KYC docs to them.

Yes, they are under regulatory pressures to ask for KYC now, specially after 2017's massive bull run. So they regulation that crypto exchanges will have to follow certain rule if they wanted to operate to let's say in a certain country that has a tight regulation as far as crypto goes.

And so exchanges can't do anything. Unless we go to DEX, but there is a question of liquidity as well. So there is a trade off, used centralized exchange but there is high liquidity but you have to passed KYC, or DEX, but then it's slow and most of the time very slow process.

lionheart78

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Quote from: Altcoiner007 on September 05, 2023, 05:51:54 AM

Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?

It is needed since the exchange is complying on government regulations. One of the implementations in a service where currency is involved is to know the customer. Since one of the regulations wanted to prevent money laundering, they need the data of every individual in order to track down their financial activities on that platform. They may even require a higher form of KYC where one have to submit their source of income.

Aside from that it is also one form of account security and to stop others from committing fraud. Here is an article from Binance stating the need for KYC: THE IMPORTANCE OF KYC IN CENTRALIZED CRYPTO EXCHANGES

Ale88

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Quote from: Altcoiner007 on September 05, 2023, 05:51:54 AM

Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?

It's to every exchange deciding what to do. Of course there are consequences because they can be shut down or fined in case they don't follow the rules of some specific country and yet they offer their services to those citizens. Some exchanges are more relaxed and others prefer to know exactly who is doing what on their exchange. If you don't like them just don't use them, there are plenty of options out there.

AmoreJaz

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Quote from: Bananington on September 06, 2023, 04:13:02 PM

If having the knowledge already that CEX is more controlled that a decentralized exchange, it should be clear that it is mandatory to complete a KYC verification on a CEX before transaction in crypto related services is approved.
No need for anonymity in a CEX, so why should completing a KYC be a problem?

The issue I am bothered about is that of not having enough knowledge on a particular CEX platform before registering or completing a KYC verification. This is when ignorant customers fall prey to scammers and hackers.
It is advised to always complete your KYC verification on a certified CEX platform before engaging their service.

the answer is actually pretty simple about the question of the OP. these CEXs are requiring their customers to undergo KYC because they are licensed to implement the AML/KYC policy according to the jurisdiction where they are operating their business. doubt the motive of the site if they are not legally registered and yet, they are requiring KYC from their customers. as these crypto-exchanges are mandated by the Central Bank to implement the AML/KYC protocol, they have no choice but require their customers to submit their KYC docs to them.

Bananington

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If having the knowledge already that CEX is more controlled that a decentralized exchange, it should be clear that it is mandatory to complete a KYC verification on a CEX before transaction in crypto related services is approved.
No need for anonymity in a CEX, so why should completing a KYC be a problem?

The issue I am bothered about is that of not having enough knowledge on a particular CEX platform before registering or completing a KYC verification. This is when ignorant customers fall prey to scammers and hackers.
It is advised to always complete your KYC verification on a certified CEX platform before engaging their service.

Topic: Why is KYC mandatory in CEX? - page 4. (Read 888 times)