Withdrawal Issues, KYC/AML and cryptocurrency exchange regulations in 2019

[Yasya]

The popularity of cryptocurrency exchanges in recent years caused the appearance of the number of schemes which enable to launder money received with help of illegal measures. That’s why the governments of some countries as well as owners of crypto exchanges aware regarding the protection themselves against money laundering. As the result, the specific regulations regarding AML/KYC procedure was developed in order to secure the cryptocurrency sphere from fraud. This process has its advantages and disadvantages for cryptocurrency exchanges. Despite the protection, the KYC/AML procedure also goes against the important principle of the crypto world such as privacy.

KYC procedure is the process of customer identity verification. As usual cryptocurrency exchanges verify their customers in order to protect themselves from illegally obtained funds. Such a process is called AML - Anti Money Laundering. Money laundering is the legalization of funds obtained by criminal means which includes actions that conceal the source of funds in order to give them a legal character. The fight against money laundering in cryptocurrency sphere consists of a set of measures aimed at preventing the use of the particular project or institution for legalizing money obtained by criminal means or financing terrorism. The development and implementation of these measures and instruments are carried out by international and national institutions, the banking and business community.

The AML procedure requires the number of expenses which can take a bite the owners of cryptocurrency exchanges. Also, the KYC procedure can stop transactions for up to 50 days or even freeze of the financial accounts. The KYC procedure breaks the anonymity of cryptocurrency as the main principle of this sphere. Nevertheless regulation has undeniable advantages in the world of traditional finance. Creating some obstacle, it protects customers from fraudulent actions of banks and financial institutions and even provides them with mechanisms for compensation for damage.

Binance, for example, allows withdrawing 2 BTC per 24h for a non-verified account and 100 BTC per 24h for users who passed KYC.
https://support.binance.com/hc/en-us/articles/115000864371-Verification-on-Binance

Bittrex has several levels of accounts. The withdrawal limit depends on the type of the user’s account. Bittrex emphasizes the necessity of compliance to “the Bank Secrecy Act, U.S. economic sanctions laws, and other legal and regulatory requirements”. The withdrawal limits for different accounts are:
- New/Unverified Accounts: 0 BTC withdrawal limit.
- ID Verified Accounts (without 2FA): withdrawal limit is 1 (or equivalent) BTC per day.
- ID Verified Accounts (with 2FA enabled): withdrawal limit is 100 (or equivalent) BTC per day with two-factor enabled.
https://bittrex.zendesk.com/hc/en-us/articles/231701788

Bitfinex requires verification for those who want to deposit or withdraw fiat money. Also, it is stated the KYC procedure enable “to speed up the deposit process”. Bitfinex doesn’t set any withdrawal limits.
https://support.bitfinex.com/hc/en-us/articles/115003355893-Account-Verification-Individuals

More and more jurisdictions around the world require licenses or regulate cryptocurrency exchanges. According to the report Blockchain and Cryptocurrency Regulation 2019 3-4% of Europe’s crime in 2017 were committed with the help of cryptocurrency and this percentage is tending to increase rapidly.
https://www.lenzstaehelin.com/uploads/tx_netvlsldb/GLI-BLCH1_Lenz_Staehelin.pdf
The most effective way to regulate the cryptocurrency exchange transactions is to regulate cryptocurrency exchanges. Every cryptocurrency exchange has its own rules on the registration process. The more exchanges require the stricter rules for account verification. As usual, the verified accounts have bonuses for trading operations, but there is a tendency that the user can’t even start trading if he doesn’t pass the verification. The effectiveness of the KYC/AML procedure depends on service providers mostly. The accounts are frozen for some period of time if there is any suspicious activities noticed.

European Union, The United States, South Korea have developed the KYC/AML rules for cryptocurrency sphere and made them an integral part of crypto regulation processes. After the beginning of the persecution of Bitcoin in China, many players moved their capital to South Korea. Until the beginning of February, they acted on the principle of self-regulation, but after the introduction of the new rules, they were controlled by financial authorities. From January 30, 2018, all Korean banks are required to exercise increased vigilance when working with cryptocurrency exchanges.

European Parliament passed rules concerning KYC/AML procedure. The innovations adopted in April 2018 entailed a series of changes in the work of cryptocurrency exchanges.
http://www.europarl.europa.eu/news/en/press-room/20180411IPR01527/anti-money-laundering-meps-vote-to-shed-light-on-the-true-owners-of-companies
As a result,  LocalBitcoins obliged to go through the mandatory registration of traders working with large capital, and opening a large number of positions. In May KuCoin platform also made changes. All users of the exchange are required to complete the authorization of KYC, indicating their passport details, gender, nationality, place of residence and so on.

The United States states that cryptocurrency trading or trading on stock exchanges falls under the definition of “money service businesses” and therefore is subject to the same measures to AML/KYC procedure as other financial institutions.
https://www.sec.gov/about/offices/ocie/amlsourcetool.htm
Bittrex, for example,  established strict rules for withdrawal with respect to unverified users. Unverified accounts have a 0 BTC withdrawal limit, thereby forcing serious traders to go through full registration.

In 2018 Mistertango provided a survey. They asked 25 cryptocurrency exchanges with a daily turnover of 100 million dollars about the necessity of the regulation of cryptocurrency exchange transactions. As the result, 88% of cryptocurrency exchanges want regulation in their operations.
https://www.newsbtc.com/2018/07/31/survey-finds-that-88-of-crypto-exchanges-are-crying-out-for-regulation/

To sum up, we think that more and more reliable cryptocurrency exchanges require the strict AML/KYC procedure for their customers. The reason is that it is the most efficient way to protect themselves against illegal actions as well as protect their users from unpredictable circumstances that can lead to accounts frozen and even to the close of the cryptocurrency exchange. This fact goes against anonymous and decentralization but corresponds to current conditions in the market.

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[Yasya]

Are there any problems in withdrawing cryptocurrency from HitBTC exchange?

It seems many users face the problem of withdrawing currency from the HitBTC cryptocurrency exchange. It takes a huge amount of time and slow support responses.

First, that you should do is to pass the KYC process. It doesn’t require while depositing funds but need during the withdrawal process. During the verification, you are required to do a selfie, a photo of the id, to provide the source of funds, transaction history, and social media accounts. They also can ask to provide the notarized translation of the documents to English. Be ready, that the support can ask you to do all these things, not in one email. So the verification process can take a long period of time.

That’s why if you are planning to withdraw your money in the future, it is better to pass all the verification procedure in advance. Because the delay in the transaction can go against your trading plans.

Reading the posts on various withdrawal problems I also noticed many complaints that the support doesn’t answer for some period of time. That’s why to be ready to contact them several times in order to get the response.

[Yasya]

Be aware that Liqui cryptocurrency exchange is shutting down due to lack of liquidity. Many users reported about the withdrawal problems.

If you have any funds at Liqui exchange, you should withdraw them right now. Be patient, as there are a lot of withdrawal requests for the moment. But be sure your opened support tickets are not closed without any response. Create the new one again if such happens and continue to monitor your withdrawal status.

[Yasya]

Do you have any withdrawing issues with Latoken cryptocurrency exchange?

There are the multiple complaints regarding the withdrawing issues. The support don't answer for a long time. We monitored the complaints and most of them concerned NEP-5 tokens.

That's why we recommend not to buy NEP-5 tokens there, as there are range of withdrawing issues.

One more recommendation if you have already bought NEP-5 tokens at Latoken cryptocurrency exchange. Do not pay for the niche from the exchange. Always withdraw to your wallet and after that pay. The reason is that if any problems arise it will be very difficult to regain your token.

If you have any questions, we are ready to assist you.

[bigcash2011]

I am looking forward to all the crypto exchanges to become fully registered, regulated and compliant with governments and also with financial authorities just like most of the forex brokers are, after that im sure new users will be more interested and attracted to crypto market as they will be confident due to compliance of crypto exchanges with regulators.

[Ozero]

I agree that checking KYC is necessary on exchanges for traders who have a large amount of trading with cryptocurrency. This is really a necessary measure to combat the laundering of dirty money.
However, I believe that in the activities of ICO, it is also necessary to streamline the conduct of the KYC audit. It should be carried out only in relation to investors who buy tokens for a certain decent amount. With respect to bounty hunters, KYC verification should not be carried out at all, since we are not investors and cannot basically launder dirty money. Applying a KYC check against bounty hunters is contrary to the task of checking KYC and therefore is illegal.

[bitcoin-shark]

i do not like the kyc procedure at all and that's why i stopped using both bittrex and poloniex when it became mandatory, fortunately there are many other exchanges that do not require it and then alternatively there are the dex, it should be something optional if you do it increase withdrawal limits but must be a user's choice not an imposition...

[KryptoKai]

RightBTC requires KYC for withdrawals which is a bit off putting for some. However, there are many exchanges to choose from like crex24 which has a lower volume but you don't have to worry about KYC

[cytpoway121]

The effects of doing  kyc and aml before withdrawal is rampant
And that’s why we need to get every information correctly before sending of tokens

Secondly, HitBTC rarely gives me withdrawal troubles

[Ranly123]

Most of the people are irritated by the fact that some exchanges are requiring KYC. I see this as a no big issue since they are just doing this protocol for the security of their exchange. On hitBTC case, I don't have any issue regarding my withdrawals so far.

[VanDeinsberg12]

RightBTC requires KYC for withdrawals which is a bit off putting for some. However, there are many exchanges to choose from like crex24 which has a lower volume but you don't have to worry about KYC

Most of exchange sites are following this way but only are putting KYC as the main requirements before you can start your deposit and withdrawal but remember if you are putting very striict rules to your exchange sites and then it will be so difficult to attract the demand.

[Yasya]

Has C-CEX cryptocurrency exchange closed the accounts without any warnings?

We have investigated the range of complaints stated that the users' accounts were closed and the funds were disappeared without any warnings. It seems that the C-CEX disabled the accounts which were not used for some period of time. There is a message "User not found or account disabled" without the possibility to restore the accounts. The support didn't answer.

Please be careful!

[dizzy1996]

Of course, I agree with the necessity of going through the verification process on the stock exchanges, and in general with any investment as this is your safety, see with this procedure you confirm that it is you who are making the investment or are acquiring cryptocurrency, as there are many scammers who kidnap your data make purchases on your behalf and this procedure is introduced to prevent it, of course there are flaws, but in my opinion it is irrelevant since this procedure solves challenges for the protection of investors.

[Yasya]

Problems with CEX.io cryptocurrency exchange

There are a lot of complaints that money didn't credit to the users' accounts. There is a range of cases when the money was sent from the user's bank account to the CEX account. The CEX ignored requests of banks and didn't credit money nor return it. There were just polite answers from the support stated the case was reviewed.

It seems that money crediting can take up to 60 days. In fact, many users expect that 60 days are needed in case of unforeseen circumstances. But the truth is that it is normal terms for CEX.io.

[jacafbiz]

There was a time I was using IDAX and after depositing into the exchange and done with trading and to withdraw my BTC I was told to first carry out KYC before I can withdraw my tokens, I just feel this doesn't not make any sense because if I won't be able to withdraw my tokens without KYC then I shouldn't be able to deposit without KYC

[rizkyhiw]

Existing problems from the past and where the advantages are for KYC determination in some well-known exchange markets and others, first some agree that KYC is very important for security and eliminates the cunning of some people in this world especially in relation to very large money and it can be set in the ledger, to control all withdrawals or shipments, the second is that many disagree because there are many people who take advantage of such situations can be called stealing someone's identity for their own benefit so be careful when verifying to anticipate that abuse.

[hakertajniak]

To sum up, we think that more and more reliable cryptocurrency exchanges require the strict AML/KYC procedure for their customers. The reason is that it is the most efficient way to protect themselves against illegal actions as well as protect their users from unpredictable circumstances that can lead to accounts frozen and even to the close of the cryptocurrency exchange. This fact goes against anonymous and decentralization but corresponds to current conditions in the market.

Yeah, because there were several hacking activities in the cryptocurrency world,
big exchanges like binance will requring some KYC to prevent withdrawal with large amount by any illegal parties such as hackers.
Against with anonymous, yet effective to prevent fund leaks.

[oppo070]

Are there any problems in withdrawing cryptocurrency from HitBTC exchange?

It seems many users face the problem of withdrawing currency from the HitBTC cryptocurrency exchange. It takes a huge amount of time and slow support responses.

First, that you should do is to pass the KYC process. It doesn’t require while depositing funds but need during the withdrawal process. During the verification, you are required to do a selfie, a photo of the id, to provide the source of funds, transaction history, and social media accounts. They also can ask to provide the notarized translation of the documents to English. Be ready, that the support can ask you to do all these things, not in one email. So the verification process can take a long period of time.

That’s why if you are planning to withdraw your money in the future, it is better to pass all the verification procedure in advance. Because the delay in the transaction can go against your trading plans.

Reading the posts on various withdrawal problems I also noticed many complaints that the support doesn’t answer for some period of time. That’s why to be ready to contact them several times in order to get the response.

What if they pass their money in an address that is different to HitBTC? like exchange like binance or some sort of that? I just wondering if that is possible since I can withdraw my money in those exchange without much difficulty. And what if you send your balance there then withdraw.

[lutcor]

I think that in fact very many people are not entirely satisfied with these processes, which de-anonymize their personality. You understand that in general, this is a very insecure procedure. Therefore, I think that all this is not very cool.

[Saugani]

Well, very good but looks bad for a small players for those who are allergic to KYC.

It was possibility of other exchanges that will follow regarding all the regulations about KYC. currently is a lot which apply KYC on the exchanges so if you needed to withdraw a large value.

Nevertheless if need to changing all the mandatory KYC, well I think everyone can do matter be forced to this. (But depending each all the individual)