Topic: Why KYC dey extremely dangerous – and usesless (Read 281 times)

If chain analyst want to follow up a case of fraud and scams, they don't need kyc to trace and take you. There are traces you may leave behind without even knowing that you actually made a mistakes. Haven't you heard of how decentralized protocols are drained and funds stolen only for the scammers and hacker get arrested. This is internet, the way it was form for you to be hidden is the same way you can be exposed with a command from a computer.

KYC is not good not because it doesn't have a good use as the government want it so as to reduce fraud and scams but the disadvantage of KYC these days outshine the advantages. You can have bitcoin in your exchange and when you withdraw it to external wallet, there are chain surveillance that are watching everything you do, it's like you are bathing and people are outside watching everything you do, there is no privacy about how you do with your coins and that's bad. The government can seal your wallet if they are in centralized exchange when they have a small case against you and that's deprived you of that freedom to what you invest, many more disadvantages.


You think there is no online manipulation and scams going on? It happens in billions of dollars but go to chain analysis and check amount of scams that has happened through crypto this year and Google total amount of scams that has happened through paper money or fiat, do the maths and you will be shock, surprised that fiats surpass crypto times more despite it been regulated by monetary policies of the central banks but crypto is always there headache. Lol.

Edit: For context- https://cointelegraph.com/news/1-8-billion-lost-web3-hackers-fraudsters-2023-immunefi

E get some platforms wey dey sell people's data in the darknet marketplace, but the most popular one be say so many of these platforms wey dey collect people's data no get strong security, so dem dey hack them wella, so when scammers hack them, these scammers go come dey sell this data in the darknet. Na so identity theft they work, before you know, scammer don use person data take create account controlled by them and dem go fit use am for illicit purposes.

I value privacy so much because the world we are today is turning into something else, as we are trying to make the society a scam free environment for all that's how some mischievous people are using it against us, KYC is not really that bad but it's just the nature in which it is being used to track people which is very dangerous because if someone has a bad intention against you it's really very easy for such person to know some personal information about you which pose a security threat against the person so for me this KYC of a thing isn't really that necessary as if you are doing any transactions you should know the person you are dealing with instead of just giving out ones information to be seen by everyone just because of KYC.

Right from the start I no like anything wey dey ask me to provide my full details, most especially when it comes to inputing some high classified personal information, most scammers indeed na through our KYC Dem take dey get out contact information and other personal details wey dem dey use take persuade us to believe say them be legit. Come to talk of it sef how them take dey get our information Dem? Though I no say some of them get device wey Dem take dey open people BVN and from there them don get your personal details, but all those site wey dey clam say dem nor dey share our personal infotion dey give third party, you no sure say them dey really share am?

Thank you Coyster for de kind words. I know say Binance na CEX, I just dey give am options to use. Honestly, I dey surprised by your response about Binance requiring KYC for P2P trade and @adultcrypto confirming it mean say na true. But wetin I yan earlier na true also, I no submit pin and I no get forgetful memory. Maybe grace cover me 


Hahaha... Dat village address part really make me laugh. I no wan talk about dis Binance matter again. Just stick with Bisq.network and kycnot.me, I no go fit yan more because I neva use dem but I believe some members fit don use dem here.

Thank you for your response. I understand most of your comments but what you've not explicitly clarified is if Bisq exchange will allow conversion from Bitcoin to Naira and vice versa. Trading crypto to crypto is easy but fiat to crypto is where I'm not getting correctly.

You cannot use any aspect of Binance without KYC. They make their KYC compulsory before you can unlock key features, including their p2p services. As Nigerians, they allow you do their KYC with your BVN or NIN that have your biodata and even upto your village address. I don't know how they were able to access it when Binance is not registered in Nigeria. 

Binance no be peer to peer exchange na, you go gats give Binance all your personal information before you go fit trade for their platform, if person dey find exchanges wey no dey collect person data, na for here wey the person go find them: https://kycnot.me/

Having said that, your translated thread no dey bad, even though i no dey too like translated threads because i know say all of us understands English and we go fit read and understand the original thread wey dey written in English, nonetheless well done brother.

Thank you guys for your comments.
 
@Richbased, de disadvantages plenty pass the advantages, na in de ratio of 99:1. Criminals don wise up, dem no wan get caught na him make dem dey ready to buy or hack anoda man personal data to take perpetratrate evil (identity theft). So no dey reason say KYC dey do anything.


You go fit avoid KYC thru P2P trades. Binance na one of de most popular for we country and na more of a centralized P2P trade dem dey do. I no do KYC deir, I only verified my email address wen I open de account and wetin I dey use most times. Also, you go fit use DEX like Bisq exchange, but just as Amphenomenon yan, e dey only supported on desktop.

Normally our informations are not safe anywhere provided you are using the Internet. This KYC of a thing dey every where and it's not just peculiar to the exchanges. When we open our bank accounts are documents and information s are taken. When we apply for a job our details are taken. When we are processing Visas and international passports our informations are taken. There are many places where we risk our informations from being exposed. There is no way we can escape KYC provided we are living and conducting businesses. When our identity gets stolen or exposed we can't really know where it is coming from. I don't think it is fair enough to just concluded that it's only the crypto exchanges or any other crypto related organization that we get the risk of our identity being stolen. Why do we find it very easy to trust the government and their agencies with our informations but are against providing our informations on platforms that supports crypto currency when we are advocating for globalization of Bitcoin. Identity theft can come from anywhere. We narrowing identity theft to only crypto space is wrong. The FBI, EFCC, Police and others gets our informations from government agencies without our consent. Their are also bad eggs in the government agencies who sells out clients identity. The question is do you question these people in the government agencies when they ask for your information before you carry out your business with them?

In nutshell we cannot escape KYC in life. And identity theft can come from anywhere and not just peculiar to exchange, ICO platforms. 

I  became cautious of KYC after i read this post it was really eye opener, then after I was grateful to God that i have never been victim of identity theft, in as much as i now know my fingerprinting and personal information is somehow all over the internet and the dangers its hold i do now avoid any KYC exchange or platform except there are no other choice for me.

Seems like @CryptopreneurBrainboss is a vendor, i guess there are other legit vendors here on our local board but you have to be cautious of the member reputation and trust list .
Non KYC exchange for trading and p2p (may have other features) include : Bisq exchange but you can only accept this feature on the bisq desktop application while the mobile application is just to check trade. here is site that will give infomation about the top trusted non kyc exchange Kycnot.me
DYOR and find the one more feasible for you, i am more familiar with the Bisq exchange
 

Me never reason this matter go these angels o, this post don open my eyes to see this KYC thing from another angle. Before now me been dey think say my hand dey clean so no need to hide my identity. But through this post I don see say even if your hand dey clean, another person fit put you for trouble using your information.  Omo things dey occur o!

Now ma to reason how person wan take dey move to avoid this KYC thing. For Naija so, e go hard for us o because many platforms wey we dey use require KYC. From CEX to other payment gateways, all of them require KYC unless person go use third-parties like known individuals wey dey buy and sell cryptocurrency.  But the risk for this one too no be small o.
 
Abeg anybody wey know safe way we fit dey buy and sell
Bitcoin for Naija without KYC, make una share the update

Well, I consider KYC as helpful and dangerous at the same time and when I say helpful I mean in a case of frauds and scams one can be able to trace the identity of the perpetrator then dangerous in the sense that through this KYC has made it very easy for criminals to also know identity of people that have large funds and can intrude in their data and see information that will lead them directly to the individual and possibly rob them or send wrong information to them for example when they know your contact address and your phone number they can easily locate you more especially people that you made a huge amount of exchanges with them, so this KYC also pose a privacy and security threat to individuals even in the quest to limit online frauds when you know the identity of the person you are making transactions with.

Notwithstanding, if not for KYC online manipulations would have been in more higher rate than it is now so I believe that in most cases, whatever that have advantages also have disadvantages but we shouldn't look at the disadvantage and undermine the advantages and solutions it can offer because when something is under control is better than when it doesn't have at all.

KYC (know your customer) procedures can pose several risks and be considered "useless" for a few reasons. First, they can be used to track individuals' personal information and financial transactions, which raises privacy concerns. Second, they can be used to discriminate against certain groups of people, such as those with certain nationalities or backgrounds. Third, they can be used to create barriers to entry for new users, which could prevent some people from accessing financial services. Finally, they can be used to impose unfair restrictions on users, such as limiting the amount of money they can transfer or spend. For these reasons, some people view KY...


Let's delve a bit more into the three main issues I outlined above.
First, privacy concerns are a major issue with KYC procedures. When you provide your personal information to a company or organization, you are essentially giving them access to your entire financial history. This information can be used to track your spending habits, and could potentially be sold to third parties without your consent. It's also possible that this information could be stolen by hackers, exposing you to identity theft and fraud. As a result, many people view KYC as an invasion of privacy.
Second, KYC procedures can be used to discriminate against certain groups of people....

Translated Topic in Pidgin Language: Why KYC dey extremely dangerous – and usesless
Original Topic: Why is KYC extremely dangerous – and usesless
Author: 1miau

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All of us dey fear make wey no lose money because of hacks, scams, our own mistake or bad decisions (to buy useless shitcoins, to sell coins too late or too early, etc). Most topics don cover issues wey be like dis one. But wen e don come to loses, make you dey aware say e plenty pass money wey person fit lose... By dis, wetin I dey try talk na de identity theft of any type of personal data. Make you dey protect your data and pay attention to privacy dey same way you dey protect your money. After all, money dey replaceable; na "only" financial loss. Once dem don steal your identity, you no fit undo am.

Na where de issue lie be dis. One of de best way to protect yourself from identity theft na to understand de lie about KYC. Some crypto services dey require deir users to undergo de so-called "KYC" nowadays. KYC mean say "know your customer" and dem dey use am force users to send personal documents to a company or organization. Already e don become a big problem as some companies dey very strict and dem no go allow you use their services, even if you just wan buy crypto wey na only hundred of dollars.

De official purpose of KYC suppose be to prevent money laundering (wey dem dey call AML, anti-money laundering) and terrorist financing. Na US mainly introduce strict KYC and AML after 9/11 and many countries come dey guided by their SEC to set KYC as a requirement. AML been don exit before but only for institutions and wen big amount of money dey involve. Average customers come dey affected after SEC introduce de restrictions. Wen you look am, KYC sound good as e go help shut down criminal activities. Unfortunately, e dey different in reality. KYC for crypto no dey always help to stop money laundering or reduce criminal activity; or de prevention of terrorist financing. On de contrary - KYC dey endanger our privacy and dey encourage criminal activities (via KYC scams, identity theft and oda means).

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KYC dey encourage identity theft

Wen person dey do KYC, dem go force dem to hand over parts of their personal identity to a third party (example na exchange, ICO etc). After dat point, dem no go dey in control of de process anymore and dem go dey totally exposed as dem go depend on de third party to handle their sensitive data safely. If dem suffer hack, the affected persons no go fit do anything.

Persons wey dey concern about de safety of deir data and wey no wan submit their personal information for KYC, dem go exclude am from using de service.

E dey clear say de risk for normal users dey inevitable wen dem force dem to give deir personal data to unknown people or centralized service. Guarantee no dey say your personal data dey safe their and dem fit even hack big companies with high security standards.

As things dey for digitalized world, companies/organizations wey dey collect KYC dey vulnerable to hacks. We don see am wen big companies like Binance suffer hack, how de hackers dey able to steal large number of KYC materials.

Dis na just de events wey dem don report. E dey very possible say e get plenty KYC hacks wey dem never publicly acknowledge, because such knowledge go cause harm to de business of exchange or de KYC providers demselves. E dey certain, say professional hackers go don dey develop ways to successfully hack and obtain personal data wey dey relevant for passing KYC.

This come lead to anoda problem: with KYC enforcement upadan, personal documents don become valuable black market commodity and already de incentive to hack or steal identities dey huge. Therefore, e dey inevitable say a very big illegal market for identities go surface if dem enforce KYC everywhere. All users wey dem force to perform KYC of any kind, dey under risk as deir personal data go fit end up for sale on de black market. E make am easy for criminals to purchase "identity packages" wey compose of hacks on de black market of all personal data wey dem need to impersonate de a user wey dem don hack him data, dem go open account with him name use perform illegal activities.

Source

Hack identities dey very valuable for criminals, especially if dem go fit tie de identity to oda details wey dey relevant for crimes against de affected individual. Some of these include:

• name and physical address (from various documents or bills)
• government-ID, passports, pictures or selfies
• biometric data (fingerprint, face- or iris-scan)
• various data from utility bills, source of wealth, employer or bank account
• passwords, used e-mail address
• used crypto addresses including deposits/withdrawals (+ linking oda related addresses via blockchain research)
  

Criminals fit use dis data in various ways wey no good:

• Dem fit use am commit criminal activities simply by impersonating de person wey dem hack him data and open account with him name use perform illegal activities.

• Criminals fit use some of de data to access oda accounts of de person wey dem hack him data:
  
  • resetting accounts via e-mail address
  • resetting accounts via biometric data
  • try to hack oda sites using de same password

• One of de worst aspects go be de possibility of a criminal to collect enough hacked data about a person wey dem go fit take evaluate how profitable wey a robbery go be. Dis go require:
  
  • de physical address of a victim (obtained from personal document), and
  • information about deir wealth (obtained from deposits/withdrawals on de account from linked crypto addresses, or documents like source of income, source of wealth etc).
  Data like dis go fit dey enough to assess a victim for possible robbery. Even if de scammers dey different countries, dem fit sell information about “promising robbery targets” to oda criminals for de home country of de victim.

• Alternatively, criminals fit collect data and match data with oda hacked data to make am dey valuable for resale.

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KYC dey encourage scams

In addition to identity theft, KYC dey offer new revenue of profit for scammers, dis na current rising scam strategy wey dem dey call “KYC scams” dem dey execute like this:

• Users go deposit crypto on a service wey no dey require KYC.
• After enough people don make deposit, de site go announce say KYC now dey mandatory and go freeze all funds.
• De site go blackmail users to perform KYC. If de user no wan do dis, deir crypto don tuwama, de exchange go seize am. If de exchange na scam, additionally dem go get valuable identity documents of deir customers wey dem fit sell or use for demselves.
• De users no get chance to defend demselves.

Bounties, especially altcoin bounties from shitcoin ICOs, dey use de same strategy. Therefore, e dey very important to dey careful of KYC scams. E dey happen especially with unknown exchanges or shitcoin bounties. E dey recommendable to use only trustworthy, and large exchange wey no go fit afford to lose deir credibility by doing KYC scam.

Under no circumstance make users perform KYC for KYC scammers. Reputable exchanges go always use deir terms and conditions for users to deposit deir money, dem go send KYC implementation notification and users go fit withdraw funds at lower limits. Dis way, users fit get de chance to withdraw deir cryptocurrencies without being scammed.

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KYC dey help scammers stay undetected

Scammers dey kpadu KYC because criminals fit take am dey undetected and continue deir illicit activities by using hacked or stolen identities to pass KYC. Wen plenty money dey involve, nothing fit stop dem:

• Already, e get a big pool of identity sets wey dey available for black market, mostly na oda KYCs wey dey hosted or hacked by scammers. De more complete de data sets be, de more valuable e go dey. To pass KYC, de criminal only need to acquire de relevant data records for black market.
• Additionally, de scammers fit also organize ICO demselves or set up a scam exchange, come request for KYC dere. Dem fit determine de data wey dem need based on wetin dem intend to do with am later. Dis go make am dey possible for criminals to obtain specific KYC data for a selected ICO or exchanges.

E dey somewhat counter-intuitive, say some "experts' now dey propose to enforce excessive KYC procedure wey crypto service customers must adhere to, wey include de submissions of beta quality scans or more data, including biometric data. Dis line of thinking dey completely wrong because e fit likely endanger de safety of users even more:

• Biometric data (fingerprint, face or iris scan), dem fit use am for illicit purposes once de hacked data end up for de hands of criminals. De damage to affected persons dey severe as biometric data dey among de most sensitive wen dem disclose am.
• Improvement for quality of de submitted data only mean say de hackers fit receive even more accurate and more valuable data. De improve level of quality make am easy for criminals to impersonate odas.
• De way criminals don dey start to reconstruct missing part of data based on existing, stolen KYC records don dey rise. Methods to circumvent video identification, like “deep-fake videos,” don dey rise rapidly. De production of realistic masks, wey go dey very hard to distinguish am from real people, na anoda way to fool identification process. Dem don already present am for 2018 35c3 in Leipzig, from wia dem demonstrate am say dem fit circumvent video identification procedures.
  
  Dis technique fit dey for dier early stage, and de result no dey perfect, but in principle e dey already possible. De prospect of rising profitability wen KYC finally don dey enforce everywhere go dey incentivize scammers to develop fake KYC methods wey go pass dis ones well well.
  
  In principle, na only criminals go dey needed: Dose wey go fit verify accounts with hack data. Dem go fit sell dis service to oda criminals for the darknet, wey alone go make am dey possible to completely undermine KYC process.

Therefore, if dem design KYC to stop criminals from doing dier job, e don fail woefully. KYC data sets for black market fit reach millions, and de number dey increase daily as KYC enforcement dey spread.

With de lastest emerging techniques to use manipulate all online KYC procedures, criminal gangs dey ready to verify accounts and sell dem to oda criminals at a high price on de black market. Alternatively, dem fit hack already-verified accounts and sell dem again.

Therefore, criminals with evil intentions get plenty options to choose from to take circumvent many kinds of KYC practice.

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Conclusion: KYC dey useless

De primary result of dis evaluation dey clear: KYC no only dey useless but e dey encourage wetin e suppose prevent. KYC dey create new area of crime (identity trade of real users) and dey increase existing areas of crime (criminals now go fit go undetected by abusing de identities of innocent users). E dey also clearly endanger de privacy and security of all customers.

Therefore, as dem dey take loud de effectiveness of digital KYC for crypto, unfortunately dey only exit in theory. E go dey good if de community acknowledge de fact say KYC no only dey useless, but e dey also dangerous and e dey promote crime. Since dem dey sell KYC documents illegally for de web or person fit fake am with de help of artificial intelligence, KYC no dey prove anything anymore.

Infact, KYC dey encourage scams and crime and e dey endanger de privacy and safety of all customers thru identity theft. E dey create dangerous dynamic for users wey dem force to perform KYC check: criminals don collect plenty personal documents wey go likely go public in de future in a way we neva see before.

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How to protect from KYC?

Dey careful and reason am well well wether using de service worth am to risk identity theft, including all of de negative consequences. Also, dey mindful of de address you link for your account in case dem hack am. Wen you link your identity with your Bitcoin/altcoin address, you no go fit undo am if person know how to associate dem.

E dey recommended to use trusted services wey no get KYC like P2P exchanges or you fit trade here for de forum using a trusted escrow.

Avoid KYC for everything else:

• No use KYC for altcoin/shitcoin bounties or altcoin/shitcoin airdrops where de owners fit be scammers or fit dey incompetent.
• No use KYC for shitty exchanges where de owners fit be scammers or fit dey incompetent.
• No use KYC for small amount of money wey no worth de risk (dis include everything wey no fit make you rich).

E dey important to point out de dangers of KYC as a preventative measure. After all, na just a matter of time before major KYC scandal go make de general public to dey aware of how dangerous and useless KYC be. Unfortunately, e go dey too late wen e happen and de damage go don already take place. You dey welcome to link dis text so dat many users (and providers) go dey aware of KYC flaws as possible.

In particular, providers wey dey abuse de security of users to make money go dey aware of deir irresponsible behaviour.

E dey recommended to use provider wey no dey request for KYC information (or wey deir limits dey justified). Dis one no be only to protect ourselves, but also to support providers wey dey protect deir customers.

Final note: I don dey write dis text for a while now, since early 2019. From dat time since I don summarize most of de known facts, e get plenty informative articles on de Internet wey analyze de problems of KYC in details and spell am out.
De points wey I don torchlight so far, you no go only confirm am wen you dey read thru dis articles, but I gat admit say I underestimate de dangers and how useless KYC dey by far for my original version. De technology and de criminal market for KYC don already advance well well as I fear and e go likely dey more lucrative due to de way dem dey increase de enforcement of KYC. Criminals, fraudsters don discover KYC for dier own benefit to take commit crimes (like KYC scam), to conduct identity trades, and at de same time, to continue dier criminal activities in de way wia dem go dey unnoticed as dem go use identities of innocent users. E go dey useful for security, data protection and crime prevention if de public recognize quickly say digital KYC no be solution, but instead na risk wey dey endanger every innocent user.

Keep am for mind:

De digital world no dey simple as many people dey reason am. As an average crypto or internet user, you fit make many mistakes, but just a single wrong move dey enough to cause casala even wen everything dey perfect.
Scammers dey intelligent, and dem dey hide traces of dier activity and dey take advantage of misconceptions. One of de misconceptions na KYC for centralized services, wey dey easy to attack and bypass. If we, de average users no care about our privacy, no educate ourselves or no claim our right of protection from criminals on de web, we fit enter casala very quickly. Privacy mean protection from scammers and na something valuable wey all of us dey entitled to. Privacy no be crime, na our protection on de web against criminals and na personal right wey we suppose try to secure every time.

Make you feel free to share dis article or translate am for your local board (you fit reserve a translation wen you send a PM to avoid double translations). E get many misinformation wey dey go on about KYC, but if people look into de details, e go fit help prevent many crimes and scams.

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Dis one na more interesting articles wey torchlight de dangers of KYC:

https://medium.com/@wilderko/how-does-kyc-aml-pose-a-serious-threat-to-your-privacy-and-should-not-be-used-at-all-88f7acd3f3b

https://medium.com/mycrypto/be-careful-with-your-kyc-documents-978ab532f2be

https://blog.goodaudience.com/the-unseen-danger-of-kyc-e3e1c4448eee