Bitcoin Forum

Crypto Exchange Poloniex to Impose Customer ID Requirements

https://media.coindesk.com/uploads/2017/01/identity-fingerprint-e1485791746936.jpg

One of the longest-running cryptocurrency-only exchanges is taking steps to bring its customer registration processes in line with the wider industry.

Announced on Dec. 27, U.S.-based exchange service Poloniex revealed it will soon disable all legacy accounts, that is unless these users complete the same verification process as its newer account users who must complete know-your-customer (KYC) due diligence. The exchange said a deadline for identification verification will be released within the first quarter of 2018.

Stepping back, the requirement is perhaps the latest move by the exchange to meet regulatory compliance and better ensure its services aren't used as a conduct for criminal activities such as money laundering. Those not able to meet the requirement deadline, Poloniex said, will have their accounts disabled, meaning they will no longer be able to deposit, trade, lend or open orders.

Similarly, a margin position will be offered an eight-week grace period before closure.

It appears that the only feature to remain functional for legacy users will be withdrawal, which is subject to a maximum limit of $2,000. Based in the U.S. and incorporated in the State of Delaware, Poloniex has seen $860 million in trading volume within the last 24 hours, according to data site CoinMarketCap.

The exchange did not disclose how many legacy accounts are to be affected by the new rule.


Source: https://www.coindesk.com/crypto-exchange-poloniex-impose-customer-id-requirements/

That is great. But they need to make things faster. When you send documents you will have to wait more them 2 months until they start the process. Sometimes even more. On Binance it has taken me less them one week. Bittrex 2 months.

Those not able to meet the requirement deadline, Poloniex said, will have their accounts disabled, meaning they will no longer be able to deposit, trade, lend or open orders.

But they will be able to withdraw. At least they aren't planning to steal from us... yet.


Greay? Why would that be great? They want to spy on us and make it easier for the government to track the users of cryptocurrencies. Poloniex did not allow users to withdraw fiat, so there was no need for identification. Why is it suddenly a requirement?

better ensure its services aren't used as a conduct for criminal activities such as money laundering.
Which means moving money under the nose of the government. Nooo, we wouldn't want people to do that, they have to obey!

Poloniex is heavily in need of more staff, but that's obviously not what they are willing to invest in. It's for plenty of months now that they are struggling with properly taking care of users trying to verify themselves. Bittrex fits in that category as well. I am not exactly sure how things work on Binance, but from the volumes they are generating, they are a big deal, so it's not that hey have loads of time to spare, which might indicate that they have an appropriate number of staff members taking care of everything. Overall, Poloniex and Bittrex are similar to each other in how they operate. Poloniex was the top tier altcoin exchange with ridiculous volumes, but messed up big time, and it seems that now Bittrex might be heading in that direction as well.  ::)

I wondered a few months ago how such a big exchange can remain under-staffed. Regarding to posts here on forum and their unofficial reddit, Poloniex still has not handled their situation with slow (or even lacking) support. It is unclear to me how they plan to sort out increased number of tickets related to verification process.

On the other hand, Poloniex is at least honest and plain-spoken when it comes to their KYC. Bittrex shut down our accounts overnight without prior notice and it forces us to send them our identification if we ever want to see our money again. No, thanks.

So far I think they have already asked for ID from all new accounts. I guess the only new news here is that they would require ID from old accounts that were previously created when the KYC policy was not yet in place. I have one of these accounts when they only needed an email and a name. Looks like everything is changing now, probably I would comply rather than have my trading account frozen.

I've recently had a quite unpleasant experience with another cryptocurrency exchange - Bittrex and its new KYC rules, so I hope Poloniex will not repeat their mistakes. If you don't know, Bittrex had very quietly dropped withdrawal limit of new/unverified accounts to zero without disabling deposits and trading, so a lot of people got caught off-guard when they tried to withdraw their coins. Poloniex on the other hand warned users ahead of the time, and they will disable trading while allowing withdrawals which is the opposite of what Bittrex did, and it makes much more sense, so it seems like the process will be much more smooth and fair.

https://poloniex.com/press-releases/2017.12.27-Notice-to-legacy-account-holders/

That is until some instructions come from the government, about 'freezing' unverified accounts. Once that happens, they will lock your account until you identify yourself. With governments coercing most exchanges into toeing the line, decentralized exchanges will gain prominence. Or people will be pushed to trade at unregulated exchanges in exotic locations.

Somewhere like that must generate hundreds or thousands of support tickets a day. Many coin users seem thick as pigshit and never follow the simplest of instructions. For instance to deposit XEM to there you MUST include a message in the deposit or they can't identify your funds.

I see minimum of 20 people a day whining about lost deposits when they didn't do this. Times this by the ones who don't whine in public and all the other coins and you'd need a staff of hundreds to get it done in a timely manner. And soon enough the fever will die down and everyone would have to be fired.

I wouldn't want to be in charge of exchange staffing myself.

Why is it great? Even if they could verify people in a timely manner, why should I feel safe verifying with them? They are asking for a full social security number now, along with passport/DL and HD selfie! These guys been hacked before, too.

Equifax can't even secure our credit reports, so why not? -- Is this the logic now?


Yeah, tell that to all the people who have had withdrawals completely disabled over the past couple months. ::)

It's inevitable and become a common thing with all of the exchanges, but some things run differently in the US and in others countries about KYC policy such as Poloniex may require some things:

For people who live in the US, but it will be different for people who live in third world countries as not everyone has social security number, but definitely has an ID.
If you don't want to go through all the process of verification, just move towards another exchange without ID requirements.

Exchanges have no choice but to comply with what the government can be requiring otherwise they can be risking the whole business from being shutdown and prosecuted -- something nobody wants to happen especially in a very profitable business with growing clients and prestige. I am sure there are members who might be turned off with the KYC process implemented but Poloniex has to sacrifice some for the many especially that they are based in USA and not in any other country. Personally, I have no problem (for now!) with this while thing as I also recognize that there are bad apples in the crate we must get away with. This is all part and parcel of the regulations imposed by the government and though we might resist such kind of an interference this is much better compared to what China did in September.

What's the big deal about social security numbers? What can questionable people do with them if they get hold of them? I see paranoia about this pop up regularly but there's no equivalent where I'm at.

With an ID and social security number you can take out loans, apply for all sorts benefits that one can claim up till 12 months up front, and the list goes on. All this through the internet without any problems.

If I look at the verification requirements of a local Bitcoin exchange, they allow people to cover their social security number when submitting all scans and personal information for verification purposes.

It goes even so far, that only governmental departments are allowed to ask for your social security number. Services, stores, hotels, and whatnot are not allowed to ask for it, which is against the law.

There's only a few pieces of information that an identity thief needs to steal your identity: name, address, birth date, social security number, and driver's license number.  For whatever reason, unencrypted plain-text SSNs are widely used to verify identity -- banks and credit issuers, hospitals (for medical coverage), utility companies all use them to approve new accounts.

That's why it feels pretty shitty to give literally all the information one needs to steal my identity to shady exchanges. There should be some middle ground where we aren't required to hand identity thieves the keys to the castle.