Exchange won't release bitcoins unless I verify identity. Advice appreciated.

[Oceat]

I won't deny that OP can't do anything to make paxful give his gunds back unless he follows their demand and go through KYC. Once you use a services, you should read their ToS first before signing up. There are things that we can't control if we are using a custodial wallet so you better follow their demand or say goodbye to your funds forever.

Most exchanges these days are required to follow their government request to ask KYC to their customers. This is one of the things that the government put on their rules and regulations.

[arrowlove]

1. like people said - not your keys not your coins.  just like banks, not your $$
2. you will not find a new york lawyer who will take your case anonymously - will not happen, when you share your info with lawyer - they will share with gov't .  In america there is no "lawyer-client" privilege - not in practice since 9/11.  Anything AML/FATCA is considered national security and all info will be shared by lawyer.
3. unfortunately......say goodbye to your privacy or your coins - you will not keep both. 

[The Sceptical Chymist]

Most centralized exchanges will require KYC/AML.

Pretty much all of them do nowadays, with the exception of oddballs like Yobit--but you can't trade with fiat there anyway as far as I know.  But OP's point is that when he deposited his bitcoin, KYC wasn't required and now that he wants to withdraw it some time later, they've changed their policy and now he has to provide proof of identity in order to get his bitcoin off of Paxful (and I'm taking OP at his word, since I know nothing about Paxful other than what others have written here).

But getting a lawyer and taking Paxful to small claims court?  That's just a very expensive way of making sure everyone, including the legal system, knows you're holding bitcoin.  You'd almost be better off going through the KYC process with them than going through the courts.  If it were me, I definitely wouldn't go that route if only for the fact that getting a lawyer is likely to cost far more than $1000.  They aren't cheap, and there's always the possibility that the court won't decide in your favor.

2. you will not find a new york lawyer who will take your case anonymously - will not happen, when you share your info with lawyer - they will share with gov't .  In america there is no "lawyer-client" privilege - not in practice since 9/11.  Anything AML/FATCA is considered national security and all info will be shared by lawyer.

Are you absolutely certain of that?  Because there is--and always has been (AFAIK)--attorney-client privilege in the US, and I've never heard of exceptions being made for financial matters.  What you said just doesn't sound right.

[arrowlove]

Most centralized exchanges will require KYC/AML.

Pretty much all of them do nowadays, with the exception of oddballs like Yobit--but you can't trade with fiat there anyway as far as I know.  But OP's point is that when he deposited his bitcoin, KYC wasn't required and now that he wants to withdraw it some time later, they've changed their policy and now he has to provide proof of identity in order to get his bitcoin off of Paxful (and I'm taking OP at his word, since I know nothing about Paxful other than what others have written here).

But getting a lawyer and taking Paxful to small claims court?  That's just a very expensive way of making sure everyone, including the legal system, knows you're holding bitcoin.  You'd almost be better off going through the KYC process with them than going through the courts.  If it were me, I definitely wouldn't go that route if only for the fact that getting a lawyer is likely to cost far more than $1000.  They aren't cheap, and there's always the possibility that the court won't decide in your favor.

2. you will not find a new york lawyer who will take your case anonymously - will not happen, when you share your info with lawyer - they will share with gov't .  In america there is no "lawyer-client" privilege - not in practice since 9/11.  Anything AML/FATCA is considered national security and all info will be shared by lawyer.

Are you absolutely certain of that?  Because there is--and always has been (AFAIK)--attorney-client privilege in the US, and I've never heard of exceptions being made for financial matters.  What you said just doesn't sound right.

Let me tone it down so i dont get banned.  Yes.  Personally can not advise anyone to count on privilege as protection from prosecution, in any country, especially usa.  But ymmv and alot of factors may influence what people 'think' is privileged.  That should be plenty advice, and research terms for anyone with real reason for concern.

[I_savor_your_pets]

Thanks so much for the replies. I've been following this thread and wanted to post an update:

Paxful told me I must use Jumio to verify my identity because Paxful lacks the capacity to verify user identity. I don't intend to hide my identify from Paxful, but I also don't want Jumio to keep my biometric data and potentially ask for more documents endlessly.

I've spoken to a friend's lawyer who is willing to help me verify my identify for Paxful and sue Paxful if Paxful insists I use Jumio to verify my identity. For now I'll hold off on suing/traveling due to covid. If anyone has anything to add, please feel free to chip in. Thanks.

[JeromeTash]

Thanks so much for the replies. I've been following this thread and wanted to post an update:

Paxful told me I must use Jumio to verify my identity because Paxful lacks the capacity to verify user identity. I don't intend to hide my identify from Paxful, but I also don't want Jumio to keep my biometric data and potentially ask for more documents endlessly.

I've spoken to a friend's lawyer who is willing to help me verify my identify for Paxful and sue Paxful if Paxful insists I use Jumio to verify my identity. For now I'll hold off on suing/traveling due to covid. If anyone has anything to add, please feel free to chip in. Thanks.

Most websites or centralized exchanges I have come across use automated services like Jumio to process KYC data. Sorry about your situation but looks like you have only 2 choices here.

Either do the KYC or accept to lose the $1,000. They are always going to refer to their Privacy policy and terms of service whenever you try to make an argument out of it.

Never keep coins in a website for long periods of time as terms and conditions can change overnight and there's nothing much you can do about it once you get caught up

[Potato Chips]

Pursuing a legal action doesn't look like a good idea cause stakes seems to be higher than the reward. It's possible to not hire a lawyer if you know what you're doing or have a lawyer who guides your for free or for cheaps but there would still be travel and living expenses if you're coming from another country...

You can try to put on a front that you're actually serious about pursuing a legal action. If that doesn't work, it's time for an ultimatum. Good luck on whatever you choose OP.

[DaveF]

Either do the KYC or accept to lose the $1,000. They are always going to refer to their Privacy policy and terms of service whenever you try to make an argument out of it.

Agreed, and keep in mind once you start going through lawyers, it can take years to get through the court system.
And if you are worried about your data being out there, or your privacy with BTC, remember all court stuff is public information. Your name and who you are brining to court will be out there forever.

-Dave