Bitcoin Forum

I have this in mind few weeks ago to create a topic about kyc on exchanges, but not limited to exchanges but all other platforms that enforce kyc before users can be able to have access to their products and services.

Note that buying verified account can lead to scam, I mean the account seller can scam you. Also the account can be blocked and require you to prove you are the real owner which can lead to money loss. Also know that the online criminals are are the ones that know the way to go about this as they are smart enough to fulfill their mission before anything suspicious surface. Also know that your bitcoin and other funds on centralized exchanges are not yours on blockchain, you have no full control over your own coins, the exchange has the full control.

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Kyc is extremely dangerous (https://bitcointalk.org/index.php?topic=5221497.0), but not to the bad actors as they are the criminals making use of fake information for kyc purpose and they are using it for fraudulent activities. So, the good people are just collateral damage of the bad actors fraudulent activities while the bad actors are still seeing successful solutions to execute their plans. To know more about this, you can read the below article about how the bad actors still able to make use of fake verification.

For $200, You Can Trade Crypto With a Fake ID (https://www.coindesk.com/policy/2021/10/19/for-200-you-can-trade-crypto-with-a-fake-id/)


Some people are traders, people can not completely remain anonymous due to one reason or the other best known to individuals. But people should not think that centralized exchanges can not be used for criminal activities. People need to think if it is necessary to give out their personal information to centralized services, it is not worth it if not necessary. The most important of all is to know how to avoid bad actors, do not think centralized services give any protection than a way to reveal your information to other bad actors during kyc breach that can lead to phishing attempts and malware attacks.

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This is not about account sales, it is about the cons of kyc, expect scam if trying to buy a centralized exchange account, or blocking/freezing of account. It is not your key, it is not your coin, avoid account buying to avoid scam.

Atimes we intend to look for trouble while everything is working perfectly as expected, life has it own rule of game which is don't expect harvest where you don't plant, if you buy an existing account from someone with the mentality to bye cut the due process or kyc terms not knowing how the account was built, its kyc details, activities carried out on the account and how to maintain the account will be a challenging threat to the new user, going by instructions and due process required to build up a new account is what should be priotized for at first, buying an existing account if traced and tracked down on a criminal record and activities then the new user will pay for the consequence.

How on Earth can you accept someone's biodata informations yours?
Why can't you be patient and buid your own account reputation?
It is also believed that customer's kyc informations should be secured with any third party agent as individuals right for privacy should be maintained according to the law.

The rule is simple:
Work hard
Earn from your labour
Build a reputation
Develop trust in yourself
Increase you capacity
Learn and make research
Avoid hastening/rush
Dont be greedy
Buying an existing account can cost you more than it can pay you.

Not only this. With the growth of technology, nowadays we are using many applications with QR codes. I am witnessing many people are proud of themselves when they share their QR codes, for vaccination like applications for Vax pass. I don't know how our information is encrypted in QR code of those applications. If they simply turn our information to QR code without a preliminary step to encrypt it, the QR code is too sensitive.

I meant people are readily to share their personal information and are not aware of risk.

Scam can happen anywhere and anytime as long as we don't take precaution and are aware of all the possibilities. Buying verified account "trading account" from other users in my opinion is not a good idea in preparation for trading activities because there is still a possibility that this will lead to scam. If they don't like to use personal identities on exchange then I think they can still trade on decentralized exchange "P2P exchange" instead of having to buy someone else's verified account for a centralized exchange.

Anything we upload on the internet becomes vulnerable no matter whichever site we are using and how trusted they were because we have seen that even the website with the most security has history of hacks.

However if KYC with basic information still leads to the illicit activities then it will evolve to the next level for example holding ID with a selfie for the verification already implemented on many sites and we can expect such kind of verification on every exchanges as well.

* If one uses other person's KYC, the other person (original) may "recover" the account at some point and steal the funds

* If one uses counterfeit KYC, he may get account closed and even face criminal charges

---- so beware of bought KYC

* If one uses his own data for KYC, bad actors may sell it for various uses, some good, some very bad (one worse case can be even getting loans from bank in your name)

So yeah, KYC is just beautiful.

KYC is mandatory, doesn't matter if you hate it, you must do it even in Binance because of the regulatory pressure. We live in the world that has law and regulation (aka government) not anarchy, so there's nothing we can do. Also, it makes sense if KYC is there to prevent money laundering, terrorism, etc. If there's no KYC, then criminals and corruptors will get the most benefit, not average people. Instead of fighting KYC, which is useless, what you can do is selectively pick service you trust to hold your KYC data, except you are an internet freedom fighter who wishes to delete KYC requirement. If that the case, I wish you good luck.

Kyc is not mandatory so far you do not use the exchanges that are demanding for kyc, so implying it is mandatory in this regard is not absolutely correct, but only mandatory on the exchanges that are enforcing it, but not still necessary to use such exchanges.

Also, you are a bit off-topic, This is not about kyc being mandatory or not, it is about bad actors using it successfully to exucute criminal activities, that people should still always be careful and learn ways to avoid being scammed.

Nope, mandatory or not is just one line of my comment.

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KYC can be dangerous for both, for users if the service providers have crappy security. And for bad actors/criminals, well, pretty sure it makes their life more difficult.

Thus, the view that (as if) KYC has no merit except to be used by bad actors isn't entirely true. Perhaps you don't think that way, but the phrasing/words sound like not come from a neutral position.

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True.

You see the statement that KYC in crypto exchanges and services helps to prevent money laundering, scams, hacks, thefts, etc., very frequently on these forums, but never once have I ever seen any data to support that claim. I've brought this up a couple of times, but again, no one has ever provided any data or evidence. I am very skeptical of this claim for precisely the reasons pointed out in the OP - a criminal can buy multiple verified accounts or fake KYC data for trivial amounts of money. In general criminals aren't stupid enough to try to launder large sums of money through accounts directly connected to their real identity.

It's very similar to the people in government and three letter agencies who claim that mass surveillance is helping to prevent terrorist attacks, despite there being absolutely no evidence that mass surveillance is effective at preventing any crimes whatsoever.

All those who are using centralized exchanges but hate KYC should realize that what they are getting into is the exact thing they are avoiding. The logic is very simple. If you hate KYC, avoid centralized exchanges.

The likely reason why a lot of people are drawn by this fake KYC market is that they don't want to undergo KYC. The problem, however, is that despite their hatred against KYC, they are using centralized exchanges. Whether or not a CEx is offering a certain deposit and withdrawal limit for unverified accounts is not the issue. It only takes a seemingly insignificant action for the KYC requirement to get triggered.

Misuse of personal data such as (KYC) is very common, not only in the crypto world or the real world. actually very risky. generally the original owner will never know if their data was misused or otherwise? I'll be honest with the "bitcoin" community here, Don't be careless to give ID just for the little things, I mean in terms of claiming prizes including airdrops. let's say $ 30 or even a nominal smaller or greater than that. I suggest you better ignore it.
a little story, I am a good person who is hurt but cares about the environment. currently I'm doing business on blockchain including ICO service since 2014 and also in illicit business (FH II) but unfortunately the site has been closed since 2017. Did you know that every 1 ID data is priced around $100 - $300. Just imagine if I do it with hundreds if not thousands of IDs, how much do I make? but I made up for it by giving 50% to people who need money.

The crypto world is a mean world. It is common that people to do anything to gain profits. Crypto is known for the big profits, so it attracts every single people who want to speculate their fate whether it's honest people or criminals. Criminals always thought about how to get an easy way to gain as many as profits with a little effort. Scamming, cheating, hacking are some efforts they do to rob people. Everything could be a chance to get money and honest people will always be the victims. The institutions not always be the injustice doer (exchangers, developers), but they also can be the victim. Even, the institution's deceivers not only do that individually, sometimes they're organized and systemized also belong in one big institution.

KYC was a problem from a long time ago in the world where decentralization should be implemented in cryptocurrency. Many people try to hinder it and some other people look at this as a chance to gain profits. Criminality not only exists just because of the criminal's intention but also cause there's a chance to do it.

Agreed. The days of non-KYCed accounts on centralized exchanges are numbered. We've recently seen lots of exchanges slash their withdrawal limits and trading limits for non-verified accounts. They can and frequently do lock accounts and demand KYC, often citing no reason at all other than that the user has triggered some unknown compliance algorithm or something similar. Soon enough, it will be impossible to use centralized exchanges at all without completing KYC. If you want to avoid KYC, then the only reliable option is to use a good DEX instead (and not a fake scam not-really-a-DEX which demands KYC anyway, like Binance "DEX").

They will know when law enforcement show up at their door because a few hundred bitcoin were laundered using accounts in their name. Or maybe when they get a bill from a bank to repay a few hundred thousand dollars worth of loans and credit cards which someone else took out in their name. Or maybe a bill from an insurance company because someone used their medical insurance. There are a lot of very expensive potential consequences to having your KYC data stolen.

Already many times on this forum, they wrote that providing complete information about yourself on the Internet can further adversely affect the person himself. But I also very often come across statements from those who claim that they have nothing to hide, and therefore they are not afraid to go through KYC and share their documents everywhere. In addition to the fact that the Internet itself collects information about users from all sides, we also discover the most intimate places in our lives, going through KYC, participating in social networks, and then we begin to bitterly indignant, where after we receive receipts for non-payment of any loans, loans and a lot of interest from fraudsters.
No need to naively think that if someone takes your documents, he will subsequently be unable to do anything with them. Just head over to the darknet forums for fun. You will be unpleasantly surprised how much and how cheaply any documents are sold for passing any KYC.

The criminals are not the only ones to blame. People or organizations that buy data from those criminals have to also take their share of responsibility. Where there is a demand there will be a need to supply that demand. We need to first and foremost discourage such data collecting and verified account purchasing. Then and only then will this cease to be an issue. If we only disregard KYC and stop using it altogether, then criminals and purchasing partys will find other ways to obtain what they need.

Centralized exchanges are toxic because of requirement on KYC and custodial wallets.

It is not always true but when you choose and use DEX, you can choose and use non custodial wallets and be your own bank.

Hence, if you hate both KYC and custodial wallets, why do you choose and use centralized exchanges.

Those who claim they have nothing to hide because they are not criminals think it is well acceptable to share your real name, your address, your transactions with anyone who asks on the Internet. I have a hunch they will change their minds once KYC data is leaked or sold to third parties and real criminals come and try to rob them. What I think is that such a state of affairs makes KYC regulations and procedures dangerous for non-criminals and beneficial for criminals. Shouldn't it be quite the opposite? If the goal is to protect honest people from hackers and criminals, then it makes no sense for exchanges to collect sensitive information that can be used against non-criminal people.

The development of technology is good, but being ignorant about the risks and implications of the technology could be bad. People should think before sharing any personal information.

I agree, KYC is evil and should be avoided at all costs!!   :o

Sooner or later all the information you provide to these exchanges is going to get sold on black market.

Then someone else will use your credentials to perform online operations.

And if so happens that they do anything illegal.

Your data will be attached to it and you'll end up in much trouble.

So, just please stop using exchanges/services with KYC.

That is like standing in a crowded area screaming I am a millionaire. I made my money in a legit way and I have nothing to hide. Come visit me anytime you want! You never know who might hear you and what intentions that someone might have. It's the same with KYC data. You submit it with good intentions, but you can't know what the person on the other side will do with it. Even if it won't be used for something bad by them, there is always the possibility of hacks and data leaks.   

The problem of KYC stems from providing your personal information to a third-party website that has full control over your records. In the event that such website takes advantage of your personal data, you are at the constant risk of having identity theft or information fraud in the black market.

On the other hand, KYC also protects the establishment in providing security to their database. Though many have argued against the usage of such, there must be a line drawn on how KYC could be balanced that will be advantageous to both parties.

Identity theft is just one of the problems. The government agencies having full access to your transactions takes away pseudo anonymity, which is one of the qualities of Bitcoin.

How does KYC provide security to a database or protect an establishment? It just benefits the government who impose the regulations on centralized agencies. There are Dexes which function without the need for personal information of its users without security issues.
A perfect balance would be to use KYC for regulated currencies and none for cryptocurrencies.

Has there ever been a case where the collecting of the personal information of customers would have a positive impact on the security of the system? To my view, you are going to be better off if there is less information to share with an attacker. An attacker himself is not going to go through KYC procedures at least with his real identity, so it doesn't make sense to assert that KYC is helping to catch criminals. No, it is not. What it does is that it helps to control honest users who have never thought of doing money laundering. KYC protects neither the system nor the users of the system. It rather protects the owners of the system from being accused of poor prevention of money laundering or, more accurately, poor control of who can interact with money.

This is very great advice, many people are out there just willing to scam innocent individuals, such advices need to be taken into consideration. As technology is advancing on a daily basis, plenty ways to scam individuals is also increasing. Buying accounts of a centralized exchange is very risk, because you can not defend the account, at the same time, if problems are encountered and you are asked to provide some of your identity, what you have will not match what was used, so you have loosing everything entirely, so let's be cautious.

That post you quoted is absolutely a spam in my opinion, how can KYC protect database which is not possible and will never be possible. So far KYC can be a means governments can identify people, also hackers and other bad actors can use it usefully to sight people to become their victims, while the governments will more make use of it for tax purposes. But what we are more careful about is to avoid scammers.

KYC sucks to be honest and why would people proceed to follow the KYC when in the first place the exchange itself is having a full control of your account/funds already? It just makes it easier for the hacker to get to your account once the exchange is getting hacked and don't expect that your name would be safe if they sell those personal information on the black market. Scammers/hackers nowadays are getting smarter and smarter just to gain access to others people account/funds. I hope exchange would do something to protect also their customers not just only themselves.

KYC is one of the most important layers of security for a platform to make sure their users do not have any kind of illegal activities and spam some people want to keep themselves anonymous and prevent the use of any kind of KYC in a platform. Selling your information is the most crucial part than having a small amount of payment it can be used as identity theft. this is the reason why we don't tolerate buying accounts with the use of others name. In some part we cannot remove this kind of buying accounts this is the way of their earning i guess exchange must need to have a monthly verification on it to prevent spam accounts.

I believe crypto space have grown up to the stage where everyone is entitled to choose any part they want, it's why we have Dex and Cex around right now, if you have anything against KYC then use Dex, as for me KYC is pretty good and necessary for half part of crypto future, why? The more crypto grows the more we will have bad actors in the space, we all think KYC is useless but it's really not if the platform is reliable like binance and as for those buying KYC aka identity cards and co. you can easily get yourself penalize

Well, I'm thinking hard how that loan part with someone else's KYC can be possible, with documents that aren't credit card. I mean, if one submits government documents and another tenders them to get a loan, there should be a picture there on the document of course. At least, I know passports and national IDs have them. Isn't it? Even cashing out money at a bank doesn't come that easy let alone getting a loan. The screening is always stringent. To me, except a bank is unscrupulous and involved in the racket there's no way someone else can get a loan with another person's documents at a bank. Again, won't the bank match the loan seeker's signature with the signature used in opening the account with them that it has on its computer? If there are properties as collateral, in whose name are they registered?

In order not to sound remote (while recognizing that this thread isn't about KYC being compulsory or not), let me quickly ask you – would you rather trade at an average exchange not requiring KYC or a more trusted one requiring KYC?

For privacy and anonymity, the best is to use a decentralized exchange like Bisq, Hodlhold or Localcryptos. Making use of centralized exchanges will make privacy not to exist for the user as they (centralized exchanges) are privacy-depriving platforms.

But about your question, this is good to read, with different veteran members sharing their opinions: Privacy vs. anonymity (https://bitcointalk.org/index.php?topic=5366195.msg58208010#msg58208010)

Let us face the truth. We pray for Bitcoin to be the mainstream of payment while our government believed in centralization way of governing and we the crypto community rely on decentralization. They said two wrongs cant make a right, if we want Bitcoin to be mainstream of payment then there's no way we can avoid KYC totally though the KYC shouldn't have been like this is the online theft don't abuse the potential of cryptocurrency.