Bitcoin Forum

Recently, I've encountered a Korean exchange that requires KYC before you can start trading. Their website says its a DEX.

I got used to the idea that decentralized exchanges like Etherdelta, Forkdelta, DDEX should not require any personal information from traders. Just connect the wallet and that it.


EDIT: For those who are asking for the exchange name, it is Allbit. Based on the replies, it seems that this case is only in S. Korea. Let's hope this does not spread.

I do not need to ask for information about KYC verification or other customer details in such systems. I've lived on the Aphelion Dex where I tried to process the problem in the last month. I want to invest in token ICO is much lower than the price of course, of course, this verification is completed in a short period of time, but as I said, normally they should not want these documents. The main objective here is to prevent ICO-style projects from buying and selling token because in some countries there is a ban on investing in ICO projects. In fact, I can share the data I received over Binance as additional information. According to the data provided by the Binance market, citizens of the following countries cannot participate in ICO projects;

Afghanistan,Albania,Belarus,Bosnia & Herzegovina,Burundi,Central African Republic,Cote dIvoire,Cuba,Democratic Republic of the Congo,Ethiopia,Guinea,Guinea-Bissau,Iran,Iraq,Lebanon,Liberia,Libya,Mainland China,Malaysia,Myanmar (Burma),North Korea,Republic of Macedonia (FYROM),Serbia,Somalia,South Sudan,Sri Lanka,Sudan,Syria,Thailand,Trinidad & Tobago,Tunisia,Uganda,Ukraine,United States of America (USA),Venezuela,Yemen,Zimbabwe

As I mentioned in the message, it is highly likely that such an application is made to prevent the participation of citizens of this country in such projects.

You know this is the joke of the day, I don't understand why people in this space are bent on abusing buzz words. Why in the word do they think a DEX need users identification, what I think they can do is to ban IP from countries where they don't want the citizens to use their platform. I know some exchanges are doing this now

It can be possible or it must be a requirement from the local regulators so the scenario can be that the exchange is fully decentralized and operated on smart contracts but at the same time it is asking kyc from each wallet based account to comply with the regulatory agencies but to be secure you should check from multiple sources before trading there.

They can call themselves anything but if they ask a kyc and calling themselves a dex i would call them clowns.

The whole thing is really simple. By definition, decentralized exchanges have no central entity that runs the exchange. Because of that fact, there is nobody to ask for KYC. If they ask for KYC, they are not a decentralized exchange, they can't be called a DEX. They can't be a DEX and ask for KYC at the same time. Case closed.

Yes DEX means decentralized exchange. Actually, it should not be required KYC. There must be a mistake, maybe you misunderstood. Today, even on centralized exchanges, although limited, you are allowed to trade without passing KYC.  ???

But the reality is different now, Many decentralized exchanges are asking KYC for verification their real users. I don't know why they call them a DEX platform. Even, right now, I signed up in Allbit exchange and they are asking a KYC verification with a selfie by holding my ID card! But I have to go through it because VANTA token only listed there and I have to trade in Allbit exchange to get VANTA bounty rewards. What a shady step is this!

Decentralized exchange - that is DEX, should not ask you to pass KYC verification.
The only reason why DEX can ask someone to pass such a verification is if someone wants their token to be listed on exchange and thus want to give more credibility of the project. But about this should be asked only developer, not ordinary traders.

It can't, that means if the decentralized just used to be a marketing gimmick only dude. The DEX will not require any personal information from the users and if that needs and then it's still controlled by the developers.

No, he is not misunderstood. At this moment I am in Allbit Decentralized exchange's KYC submission page! Even without verification KYC, I am not able to deposit here! Can you think about it? Allbit is a Korean decentralized exchange, for Koran users, they don't ask KYC! But for the outsider of Korea, people have to go through KYC with a clear selfie by holding the ID card!

Can you disclose what that exchange is? there's no need for a DEX to ask their traders to comply for a KYC requirement. It's the reason why everyone wants to trade with it because there's no need for us to take that kind of verification.

If an exchange calls themselves as DEX but they are requiring such KYC.

They aren't really a DEX, they can claim it but they will never be a DEX if they have that.

I need Jo one to tell me it's no DEX. Well, it must be seen to fulfill some of the criteria of a DEX, but my expectation and based on what I have read, is that DEXes do not require KYC.
Another thing that I discover with some decentralized exchanges, is that, some of them are considering blocking some countries, such as US from probably withdrawing or trading.

the goal might be good so money laundering can be minimized but I think there will be many people who don't like it for reasons of privacy and not simple
I don't really mind if I have to give my data but I don't like a process that takes longer than usual so I prefer simple exchangers rather than exchangers that need KYC for reasons of convenience

In a way they can because decentralized part means they aren't holding your keys. If you don't send it to their wallet before exchanging with someone else it's already decentralized. KYC shouldn't exist there because they aren't responsible for your trades so they shouldn't have to verify you but maybe in some countries KYC is required for them to operate at all.

This could be the reason why the claim of being a DEX.

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On the KYC part, the exchange should at least allow users to test their platform first. They can require KYC for withdrawals and not on deposits.

The very reason why DEX is booming because of this decentralized platform, no one is requiring you to provide any private information about yourself, KYC is for centralized operation so if this exchange required you to follow this rules, the need to change that offer not being a dex type but a centralized one.

The idea of DEX exchange might change in the future world wide when strict rules and regulations are implemented, Korea does have a regulation when it comes to running an exchange and they have to follow the rules if they want to function in that country and so is the reason they are asking for KYC to abide by the rule and nothing else, i know mixing sites that implement KYC  :D . You can trade elsewhere too where they give the freedom of not verifying your account, it is your choice.

absolutely not.

one of the main characteristics of a decentralized system is that it is permissionless. which in simple terms means you don't have to get the permission to use that decentralized system from any authority which in this case translates into not needing KYC. and if they do enforce it and have a way of preventing you from using that platform if you don't give them any KYC documentations then it means it is NOT DEX.

Which exchange? Can you give me the link of that exchange?

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Of course not! The exchange who requires the KYC for users is not a DEX and not related to DEX at all. Because in my opinion, KYC applies to Centralized Exchange (although there is a Centralized Exchange that does not require KYC).

exactly. decentralized exchanges are created for that people can themselves be responsible for their money

I think there are not much to do, after the ICO projects not the exchanges asking KYC procedure from us. I just send my KYC info to IDCM exchange, which is very big exchange and if i didn't send my KYC i couldn't make withdraw, they made me send! If the big exchanges start to ask about our KYC, all exchanges will ask for it. The main think that i came to this market because i could stay invisible but now i have to send my passport and address to everywhere and this is not good!

DEX exchanges only require private keys or trusted party applications (metamask).
I just found out that DEX exchanges must be KYC, I think that's weird

Maybe it can be a scam site so never allow yourself to enter any details about you and give the wallet details or any crypto deposits you will be sucked soon after you gave those details.

Korean crypto-currency or Blockchain base industry are regulated by the South Korean Government , Thats why its mandatory for its citizens to do KYC or to its costumer. But im not sure if its related to exact withdrawal limitation,But most of the time and most exchange is not employing mandatory KYC for its costumer. in the Korean DEX i think its still be a Decentralized Exchange even though its required KYC as long as they are not holding the traders account or assetts or not costudial just like the Centralized Exchange do!

I suppose there is a way to do KYC even for dex. In this case should be used some kind of blockchain KYC platform (like civic). Otherwise it doesn't look that good at all.

no, once they ask for the kyc procedure they can no longer be called exchanges decentralized / dex but they become hybrids exchanges as it becomes idex that has in anticipation the introduction of kyc

I don't think you understand the meaning of DEX. A decentralized exchange can't ask us for a KYC. If it is already automatic, it is not DEX.

Nope they are not Decentralized exchanged, I have traded on at least 5 DEX and not encounter any form of verification, they cannot fool traders if they think they are DEX because we all know what is the difference between the two.

every time i start thinking i have seen every strange thing coming out of the altcoin market, i  will soon find a new weird thing pop up in my face! this one is the latest thing and it is one of the big ones in my opinion. to claim to be a "decentralized" exchange while requiring KYC is just absurd.

i guess the real question is why are they doing it? what would they achieve? more money? or is binance already taken over by the government?

Decentralized exchanges can´t request KYC, that is the main feature to stay anonymous / pseudoanonymous. Because what authority will check your KYC? The nodes?

In the crypto space decentralization means users are the master of the data right? So if an exchange  requiring users data then it isn't a decentralized exchange.

I don't think they should call themselves a decentralized exchange, why not name the exchange, there must be some misrepresentation it's better to post the name in the main post so we'll see if it is really a decentralized one or not, we know the difference between a centralized and a decentralized one.

KYC and DEX is basically against each other terms. If a place needs to be decentralized they need to have no central governing factor whatsoever, they need to have no owner no worker and no boss, which means that there will not be a central operation system that needs to respond to a higher authority like SEC or IRS or whatever.

That means if they require you to give your KYC information like passport data or whatever and provide that to a government branch then there is someone who takes your info and shares it with someone, if there is "someone" that does that even automatically then it can't be considered decentralized.

Basically, they are not things that can coexist in the same place, if one exists then other can't and that is why KYC can't be asked in a DEX place.

From my understanding, kyc registration is not required for Dex exchanges and usually can't be held in Dex exchanges except a third party is involved and that usually involves special cases where members of some countries are not legally allowed to participate in cryptocurency trades

As a rule, it is better to bypass such exchanges, decentralization should remain decentralization, and therefore there can be no de-anonymization. However, there are exceptions when required by the laws of the country.

I guess this could happen due to local regulations though basicly dex and kyc are two opposite things which cleary define the decentralized and centralized exchange mechanism.

No way. Decentralised exchanges cannot require a KYC process, because they do not have any access to your funds. You always have control over your funds and I would stay away from such exchanges that require KYC.

No, a decentralized exchange shouldn’t be asking the users to do KYC. This defeat the purpose of being decentralized. If I were you, I will not trade there.

If you need to verify your account to be able to trade so it's not a DEX. As I know we no need to do anything to be able to trade on DEX even creating a new account, we just need to create an wallet only :)). But I don't know if the crypto exchange you mentioned about is really a DEX or not or maybe it's own rule of Korea government for crypto exchange.

i don't think you clearly understood my post.

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Thanks for the replies. I've edited my post to include the name of the exchange. Check it yourself.

This is the first time I hear about KYC at a Dex. Any particular reason from exchange about why it need KYC? Hopefully other Dex won’t follow this practice.

in my opinion it could be called dex because understanding dex in my opinion is only limited to the market specifically on certain platforms such as ethereum which has etherdelta or waves that have a platform wave client, but of course without kyc it is a good choice for market dex

True, why must be called DEX if they still make any rules. Maybe they called themself DEX only from system. But maybe people will know if exchanger that make rules like that is not DEX and aware before use it.

It seems to me that the provision of personal user data is already contrary to the very idea of ​​using cryptocurrency and blockchain technology. Nevertheless, today many states are demanding to fulfill the conditions that will give the opportunity to know their client.

The easiest way to minimize money laundering is to exclude fiat from the exchange and work on crypto pairs. I don't know why but some exchanges that used to not require KYC like poloniex because there was no fiat there changed their rules and asked people to verify. How would you explain asking people to verify if you don't trade in fiat so there can be no money laundering?

If They ask for KYC then consider them as NOT DEX for sure, this is something final no matter what they claim.
I'm not against KYC, but claiming to be DEX while asking for it is stupid enough to claim it's DEX.
Exchanges will obey the monetary global system sooner or later, crypto won't survive without doing so.

LOL. This is the first time I heard about a DEX requires KYC. LOL. I don't know why the owner of this exchange still think it's a DEX while requires KYC of traders whom wanna trade on this exchange :). I think you should stay away from this exchange, maybe they wanna steal information of users to sell or something like that.

So they lie to you. Because the dex verification is not required, everyone knows this. If you need to use this exchange, you will be required to undergo this procedure.

exchanges asking about the KYC verification will always be not convenient for me to do and that trust the exchanges in most of the time because this new implementation will made lot of difficulties for making the exchanges more difficult so I don't have confident about kyc verification.

Hell no, a decentralized exchange doesn't need any KYC. if it requires KYC, then it's not decentralized because it's deviating from the original purpose. Decentralized exchange account should be fully controlled by the user.

A decentralized exchange simply implies that you have full control and anonymity of your account. If a decentralized exchange requests something as important as KYC, then it is obviously a centralized exchange by such act. You need to be careful with your tokens in that case.

If a DEX required KYC then it is a scam, stay away from it and use something else like BISQ. Not sure what the binance DEX is going to require, but if they start saying upload photos and driving licenses, i'll say goodbye to it

a dex exchange should not require kyc. for me, a good dex exchange means that i do not have to deposit any data from me. in my opinion, a dex exchange asking for something like that is not a real dex exchange for me.

If this is true, it can not be called DEX.
But I think it has already clarified to you what can happen when a certain person from some countries use these services.
However, the DEX should not fear this because each one is responsible for their actions.
It's time for platforms and services not to spend energy concerned about punishments because irresponsible people use their services.

This is a big NO response and also a suspicion decentralized exchange as well. It may be trying to boost its credibility by performing a KYC so as to deceive the unsuspecting crypto traders. Be careful with such DEX!

I am just thinking that the OP actually found an exchange that calls itself DEX and yet requests for kyc before you can withdraw.
In my opinion, the OP, should instead go for the real DEXes instead of such exchange that is asking for kyc.
One of the main reasons people opt for DEX is to avoid such thing as kyc. So since it did not meet your desire, then opt for another.

Dex is made to keep traders' privacy safe. And it would be funny if Dex asked KYC for its users. Dex is an exchanger that has only one pair, Altcoins / ETH. And Dex is built with a smart contract from the Ethereum network.

No! they can't proclaim their platform as DEX if it requires KYC because it is like giving authority to their users which is far away from the true meaning of DEX but maybe they are combination of both centralized and decentralized exchange.

Of course, in decentralized exchange does not need to pass KYC. But maybe this exchange had a reason why it decided to identify its users. Or she doesn't understand what decentralization means.

if the exchange has KYC, of course it is not dex.
it is definitely a centralized exchange because only a centralized exchange has your private key and requires the KYC to trade it.

Of course a DEX cannot demand KYC. This is bs... We need DEXes without KYC.

As everyone is saying obviously its not a DEX, that exchange is a clown. Everything that requires kyc is not a dex I made a glimpse on the exchange site they have really done it saying Decentralized P2P Exchange.
I have seen this on their privacy policy.

"Personal information collected in the process of using the membership-based services shall be processed for the following purposes: confirming identity, confirming User age, identifying individuals, preventing/identifying illegal use, preventing unauthorized access, confirming membership intention, membership restrictions, confirming identify of legal representative, preserving records for dispute settlements, processing complaints, and delivering announcements. "

lol, sure no. if DEX asks a documents, from that moment it becomes CEX ;D
literaly, how can they check your documents without centralizing?
for me it is even strange when exhcanges ask KYC for small amounts or cryprto-crypto trading.

Centralized exchanger must be need KYC to comply with government regulation to avoid from money laundering. If that Korean Exchanger, perhaps government require KYC from every member and i think its fine, but basicly DEX should be not requiring KYC

In my own opinion, I am not really brainy when it comes to dex or anything but I believe that kyc is one of the important factor in any or all the exchanges, we knew already how important it is as a user and it serves as an security factor.

Trading floors from Korea force users to KYC before starting trade. I heard that because their country taxed traders

Thank you for mentioning the name. I will ask the Allbit team, this is not a good manner! And, I would suggest traders avoid these shady exchanges. I don't know why they are asking the user's real identity when the crypto market's nature is decentralized and anonymous! They excuse, KYC is important to prevent scammer and to detect real users only, but what is happening every year? Billions of crypto asset hacked last year from the exchanges! KYC just a formula for them to prove they are a good exchange, but they are wrong here! and KYC verification in a decentralized exchange? Just Ridiculous!

The data must be stored somewhere else in the cloud, that itself obviously cancels out the very purpose of being a dex which purpose is to make sure that there is no one storing the client data.
Maybe the government law forces them to do so but nonetheless might aswell off being a centralized exchange instead.

I guess it can just for the technical reasons and the way transactions are executed. But not for ideological reasons. It really doesn't make sense for such a DEX to exist.

It is not possible for a fully decentralized exchange to conduct KYC and still call itself a dex, the reason why it's called a decentralized exchange is because it has no central database or central wallet where the user's activities are being stored. So i will say that any exchange collecting KYC and still referring itself as a DEX is a joke because they are still centralized.

Even if they are a good exchange I will not even try to trade here because I'm having a had time to understand their interface, but I'm surprise that they have good traffic if they only cater for Korean traders, this must be a good exchange for Koreans.

im a regular user of decentralized exchanges and im not only trading on one platform but almost all dex exchange ive done testing them out and i dont see any kyc on their sites . what you are saying is true  , only centralized exchange have a kyc but they are not necesary requiring it before you can start using their platform  .  kyc only meant if you want to increase your trading limits  .