KYC process and reasons for rejection: Is crypto still fair?

[mugwump]

There is a lot of disappointment currently in Dethers community. They asked their ICO-participants to fulfill a KYC-procedure prior to being able to contribute to the ICO. A lot of people failed. I personally have experienced this twice now with Dether and WePower, two ICOs with a huge interest in their ICO. In both cases, I have been rejected. I am a German citizen and have high-quality pictures of my German ID plus a high quality mugshot that I have used in several ICOs with no problem. I have also openend an online bank account with a German and a Finnish bank with no issues whatsoever.

At least in the case of Dether, there is speculation that the team might just have been overwhelmed by the number of people doing KYCs and then just randomly rejected a lot of people. In their Telegram group they said that out of 5,309 people 1,941 failed the KYC-procedure but they could not tell whether it was a technical problem or a lack of quality in the pictures. Even if that particular ICO and KYC was a mess, there is still some need for discussion around how the crypto community can ensure that a majority of people get the chance to participate in new projects.

This is especially true if we consider reasons for being rejected during KYC apart from just bad image quality. These might include:

* wrong/risky/uninteresting nationality
* haircuts or facial hair (WePower actually stated beards under "not natural face changes" as an example of reasons for being rejected WTF??)
* confusing names (i.e. different spelling on ID document, multiple names, the order of name and lastname/family name, etc.)

I always saw ICOs as a way for people from all around the world to be able to invest in promising startups, regardless of their background. But as more and more people join the game, it is becoming increasingly difficult for the small fishes to participate. If even I as a privileged German citizen am being rejected: How will new projects and their KYC-partners ensure that everybody gets a fair chance? I don't want to see people being rejected just because they wear a beard (Sikhs, muslims) or because they live in the wrong country (sorry though for USA and China)!

[NutellaboY]

I'm against the whole idea of sharing my personal data to anybody but if they even rejects your ID ... that's really weird. What the point of this KYC then?

[ZaoXhou]

I'm against the whole idea of sharing my personal data to anybody but if they even rejects your ID ... that's really weird. What the point of this KYC then?

Wouldn't surprise me in the slightest if some people here will have to deal with identity theft in the near future.
It will be a long nightmare for them.

[Lingqingyi]

First, KYC seems to me to be the beginning of a nightmare.
Because a lot of ICO team collected our KYC information, but in private sale KYC information, our data's privacy, I think this is very dangerous, however, there is no any law to limit the team collected KYC and KYC correctly use. On the contrary, because of the further regulation of cryptocurrency in many countries, these teams can ask us to provide KYC without any reason.

[NutellaboY]

Wouldn't surprise me in the slightest if some people here will have to deal with identity theft in the near future.
It will be a long nightmare for them.

True that. You send your ID or passport copies to the scammers and they just use your identity for crime or something. The whole idea of KYC is wrong. If they want me to send them my ID why don't they send theirs to me?

[dumplingsandsushi]

"Is crypto still fair?"

Ummmm, since when was crypto "fair"?
Also, since when was any kind of market "fair"?

Startups have the right to accept or reject whoever they want.
It can be argued that allowing anyone to participate can build trust in the company, but seriously, that's not the case.
It's not that way because when you strip it down, it's a we're in it for the money scenario, on both sides..

With that being said, it honestly just seems to be a technical problem.
Most startups have only 10 to 20 employees.  Going through thousands of KYC applications is likely to cause errors.
Although it does suck, it seems inevitable that there would be problems that pop up.

Best thing is to move on to another one.  There are so many legitimately good startups and ico lately that you are bound to find another one.

[IrenNTA]

Yes, KYC becomes a headache now. I missed Experty ICO, because I failed to pass validation on Bitcoin Suisse. It's almost impossible to pass the validation their, especially if you are not from Europe. I don't understand why ICO need all my personal information? If they just want to avoid duplicate accounts, then it's enough to collect passports. But most of them ask for a residence approval. I don't think it's safe to share your address with unknown people. But we have no choise, so we have to deal with it somehow.

[djpitagora]

imo if you are into crypto you are probably here because of satoshi's visions and how it will shape the future and you should be outright rejecting any such procedures. If it required a KYC that it's probably some bullshit/scam ICO anyway. Buy your coins on decentralized markets like Bisq and take care of your private data. Don't give it to every scammer online.

[Viecoin]

KYC does seem a bit of a nuisance but on the other hand, if you are lucky enough to have your KYC documents approved, you would have an edge over the masses that have not passed KYC and are willing to pay a premium to buy your ICO tokens from an exchange.

[ZaoXhou]

KYC does seem a bit of a nuisance but on the other hand, if you are lucky enough to have your KYC documents approved, you would have an edge over the masses that have not passed KYC and are willing to pay a premium to buy your ICO tokens from an exchange.

I don't know the numbers, but I'd argue that the "masses" never even go through the kyc process.

[Vik_the_Carpentner]

I don't know the numbers, but I'd argue that the "masses" never even go through the kyc process.

Agreed
Most of people just dont care about KYC and if they see that the project has it they'll just turn away and put their money into another ICO.

[AlexGN789]

not all projects will make you go through a KYC procedure. you sure there is nothing shady with them?

[boyjackyou]

Know Your Customer or KYC isnt really compulsory but some ICOs from U.S and CHINA will require you this kind verification to protect themselves from fraudulent activities because from the past there are abusive ICO investors thats why they have tightened their security but there are some disadvantage with KYC one is you dont have privacy,second your information might be sold to others,or it can be used to something else.You can choose between joining or not if you arent confident with these KYC projects.

[Sniar]

Know Your Customer or KYC isnt really compulsary but some ICOs from U.S and CHINA will require you this kind verification to protect themselves from fraudulent activities because from the past there are abusive ICO investors thats why they have tightened their security but there are some disadvantage with KYC one is you dont have privacy,second your information might be sold to others,or it can be used to something else.You can choose between joining or not if you arent confident with these KYC projects.

Your words has a sense. I have never been thinking about the KYC reasons in that way.
One more reason for Europeans to hate Americans. 

[ryjin1007]

Well expect some theft identity that will be scattered in the near future to be honest crypto is needed to be anonymous that's why bitcoin is decentralized i government is making a move because each airdrop and ICO needed KYC?

[sehoon]

I also find this disturbing sometimes. And what if the person doesn't have the information written? Will he resort to giving someone's personal information? Is that the best way to deal with this? I still don't get the essence of having KYC forms and getting rejected.

[xCryptoManiaX]

This is why projects like Civic, SelfKey and Dapps on ICON, Stratis and etc. are being made. We might use them soon for KYC

[mugwump]

"Is crypto still fair?"

Ummmm, since when was crypto "fair"?
Also, since when was any kind of market "fair"?

Startups have the right to accept or reject whoever they want.
It can be argued that allowing anyone to participate can build trust in the company, but seriously, that's not the case.
It's not that way because when you strip it down, it's a we're in it for the money scenario, on both sides..

With that being said, it honestly just seems to be a technical problem.
Most startups have only 10 to 20 employees.  Going through thousands of KYC applications is likely to cause errors.
Although it does suck, it seems inevitable that there would be problems that pop up.

Best thing is to move on to another one.  There are so many legitimately good startups and ico lately that you are bound to find another one.

It's not a market unless it's open to anybody. It's a common misconception that a market with entry barriers is anywhere near what a libertarian would call a free market. It's actually the opposite and quite interestingly, people who tend to be against a free market often are the same exact people who will come up with some kind of bureaucratic-socialist pseudo-solution to maintain fair chances for everybody.

I think it's hypocritical to come into this crypto sphere, build a company around an idea and then be picky about your community. And if that's what Dether or anybody else is doing, then they should be honest about it and say: Listen, guys, we want money, but we don't want anybody's money. Instead, these people show up and talk about decentralization and changing the world and helping people but implement a KYC-process that is exclusive as fxxk. That being said, yes, they can reject whoever they want but they should not pretend to be a community project.

[deepcoreotc]

I wonder as well if KYC crypto projects like Civis and SelfKey are gonna be used in the future for ICOs and etc.

[eternalgloom]

I'm against the whole idea of sharing my personal data to anybody but if they even rejects your ID ... that's really weird. What the point of this KYC then?

Wouldn't surprise me in the slightest if some people here will have to deal with identity theft in the near future.
It will be a long nightmare for them.

Yeah, I had also mentioned this on another thread earlier today, it's something most people don't even think about while it's a real danger.
You can never know for sure how good their security is, exchanges do get hacked quite regularly.

Though for most people, it's unavoidable if you want to trade at a popular exchange, so at least choose one that takes security serious.