there is no regulation/law that prevents watermarks
as long as the watermark does not cover the information on the identity
EG a photo should only watermark over the shoulders/below the neck area so they can stil see the face to compare to other faces
usually best water mark it with the service your sending it TO
EG
"submitted TO coinbase". when sumitting to coinbase
that way if a naferious coinbase temp/employee tried making a bitpay account using your ID. bitpay will see its not a fresh submission but ID grabbed from coinbase. which would usually raise red flags
it also helps if bitpay then contacted you. you can see that your ID was stolen/cloned via coinbase and not via other services you have signed up to
most countries KYC policies dont actually do anything with the identity. they dont pass it onto authorities nor do checks at the application stage.
meaning you are not being vetted and scrutinised at application stage. they just need an identity on record for 3 reasons:
1. it stops people making more than one account
2. when issues do arise, its harder to then ask for ID.. compared to asking upfront and then only using it if problems arise
3. it scares away naferious people for even signing up as they fear their nefarious future actions will haunt them later
in short most services just store it and only do checks if red flags are raised. the only real time there are checks done is if the business offers
services that can cost them money. EG offering credit/loans/bartabs. a business will want to chck if your able to handle repayments, had court issues they need to know.
but straigh 1 for 1 swaps with no loans or delayed payment usually doesnt need scrutiny. and as such just having ID with readable information on it is enough
I think This information are very valuable for all of us.
Thanks for letting us known. now i see why your rank is Legendary