[2019-07-18] IDEX set to begin transition period for KYC and AML compliance

[bbc.reporter]

I reckon they should also announce their transition period for the change in name from IDEX to ICEX hehehe. Also, look at their announcement's added bonus. Who are these scammers trying to scam?



IDEX, the popular hybrid decentralized exchange, today made an announcement concerning new and existing users, who will now be able to create Know-Your-Customer (KYC) verified accounts from Wednesday, July 24th, 2019. This is in line with last years statement from the exchange and an announcement in March, which disclosed a collaboration between IDEX and regulatory technology (RegTech) provider, Blockpass.

The IDEX team not only pursues compliance, but is also eager to start this new phase, so customers are somewhat closer to the exchange. This will make it easier to share news and product updates as well as listen to the community and use feedback to create more features.

“As an added bonus, the launch of accounts means we will finally get to know our customers – i.e., you – better. We’ll more easily be able to launch requested features, and we’ll finally be able to get in touch to share product notifications, asset updates, and essential alerts to help you stay on top of your trading.”
– IDEX Team

Read in full https://www.cryptoninjas.net/2019/07/17/crypto-exchange-idex-set-to-begin-transition-period-for-kyc-and-aml-compliance/

[joelsamuya]

Can this be the start of the new trend...decentralized exchanges doing what centralized do? In other words, we are just experiencing the reality of doing business and the power of the government to regulate exchanges. Amidst the many idealistic statements as to the power of the government, the thing is that we are still living in the real world and not yet in the ideal one. Dealing with cryptocurrency does not mean we can now do away with the power of the government....sad but true. I am sure that other decentralized exchanges will be following this step made by IDEX. KYC and AML compliance is the way for these exchanges to continue doing business, that is the fact whether we like it or not.

[Schirer]

This is surprising and a bit sad. I was certain that they are and will remain decentralized in all the ways. This shows that those exchanges which will remain completely decentralized will be own completely anonymously , most likely will have shit interface and  most liekly will be shady. Otherwise they will risk to have regulators punish them.

[elda34b]

This shows that those exchanges which will remain completely decentralized will be own completely anonymously , most likely will have shit interface and  most liekly will be shady. Otherwise they will risk to have regulators punish them.

There is Bisq though.

Probably the only way to keep trading without having to reveal your identities is via OTC deals in this forum with trusted escrow. But if the day were government request any website that has trade activity even for a little to also do KYC comes, I'll probably stick with my peers if I wanted to trade.

[Harlot]

Better to comply with KYC and AML requirements now then be temporarily closed by the authorities for non-compliance. For the people who are sad on what has happened don't be because this is an inevitable thing to happen once the government starts to “care” for our industry. They know that our industry is a billion dollar industry now and they don't want to miss the opportunity from earning a little bit more tax from their citizens or at least make sure that they are getting all the tax obligations they have.

[timerland]

IDEX, the popular hybrid decentralized exchange, today made an announcement concerning new and existing users, who will now be able to create Know-Your-Customer (KYC) verified accounts from Wednesday, July 24th, 2019. This is in line with last years statement from the exchange and an announcement in March, which disclosed a collaboration between IDEX and regulatory technology (RegTech) provider, Blockpass.

The IDEX team not only pursues compliance, but is also eager to start this new phase, so customers are somewhat closer to the exchange. This will make it easier to share news and product updates as well as listen to the community and use feedback to create more features.

“As an added bonus, the launch of accounts means we will finally get to know our customers – i.e., you – better. We’ll more easily be able to launch requested features, and we’ll finally be able to get in touch to share product notifications, asset updates, and essential alerts to help you stay on top of your trading.”

I don't get the point of this.

If they are trying to go the decentralized route, then why would anyone in their right minds be willing to conduct KYC? Also, having this verification process essentially says that at the end of the day, they are still a centralized entity. That does not paint a very good public image.

Furthermore, why do you need to have KYC in order to take into account people's opinions when you're launching new services? They could already do this with feedback gained through Twitter or even their own support ticket system.

If they ever enforce this on a mandatory basis, they're driving themselves out of business. But I think regulatory pressure comes into play as well, might not even be their own choice.

[bbc.reporter]

Can this be the start of the new trend...decentralized exchanges doing what centralized do? In other words, we are just experiencing the reality of doing business and the power of the government to regulate exchanges. Amidst the many idealistic statements as to the power of the government, the thing is that we are still living in the real world and not yet in the ideal one. Dealing with cryptocurrency does not mean we can now do away with the power of the government....sad but true. I am sure that other decentralized exchanges will be following this step made by IDEX. KYC and AML compliance is the way for these exchanges to continue doing business, that is the fact whether we like it or not.

They have taken away their most important advantage over centralized exchanges. What would be next? The ability to freeze their users' funds? Why choose the decentralized roadmap for that? Be centralized.

[Schirer]

I don't get the point of this.

If they are trying to go the decentralized route, then why would anyone in their right minds be willing to conduct KYC? Also, having this verification process essentially says that at the end of the day, they are still a centralized entity. That does not paint a very good public image.

Furthermore, why do you need to have KYC in order to take into account people's opinions when you're launching new services? They could already do this with feedback gained through Twitter or even their own support ticket system.

If they ever enforce this on a mandatory basis, they're driving themselves out of business. But I think regulatory pressure comes into play as well, might not even be their own choice.

Actually the reason is very simple why they are doing this, they dont want to pay hundreds of thousands in fines and even risk prison.
Etherdelta paid its fines already!
(https://www.coindesk.com/sec-charges-etherdelta-founder-with-running-unregistered-securities-exchange)

I remember that IDEX has been more careful and has periodically delisted tokens which had a higher chance of being defined as security, but that will not be enough if SEc turns its attention to them.

Their comment on why they need KYC, is just funny and obviously trying the stare the attention away form real reasons.

[carlfebz2]

Can this be the start of the new trend...decentralized exchanges doing what centralized do? In other words, we are just experiencing the reality of doing business and the power of the government to regulate exchanges. Amidst the many idealistic statements as to the power of the government, the thing is that we are still living in the real world and not yet in the ideal one. Dealing with cryptocurrency does not mean we can now do away with the power of the government....sad but true. I am sure that other decentralized exchanges will be following this step made by IDEX. KYC and AML compliance is the way for these exchanges to continue doing business, that is the fact whether we like it or not.

They have taken away their most important advantage over centralized exchanges. What would be next? The ability to freeze their users' funds? Why choose the decentralized roadmap for that? Be centralized.

True and I'm questioning already my mind on what DEX would be the next on line from switching for Dex to Cex.lol For IDEX users this would surely be a serious thing and instead of using the platform they would rather have the thoughts on switching to famous centralized ones yet they would still need up to pass some KYC and AML compliance.

[timerland]

-snip-

Actually the reason is very simple why they are doing this, they dont want to pay hundreds of thousands in fines and even risk prison.
Etherdelta paid its fines already!
(https://www.coindesk.com/sec-charges-etherdelta-founder-with-running-unregistered-securities-exchange)

I remember that IDEX has been more careful and has periodically delisted tokens which had a higher chance of being defined as security, but that will not be enough if SEc turns its attention to them.

Their comment on why they need KYC, is just funny and obviously trying the stare the attention away form real reasons.

Thanks for the clarification. I've been basically thinking of the same thing.

I guess the reason why Idex are extra cautious in this issue is because of the fact that they are a hybrid - they are not a true decentralized exchange which can avoid centralized strikes on their site. And given the fact that they are a registered company in Panama, they are more prone to regulatory pressures as opposed to some decentralized exchange site that exists without a clear ownership/management team behind it.

I also read in a medium article today that:

In addition to IP blocking, IDEX will be implementing KYC/AML policies in order to comply with sanctions and money laundering laws

I'm still not sure how markets will respond to this. IP blocking in itself will drive users away, and KYC/AML even more so. With the lack of liquidity already an issue for decentralized exchanges, this could prove to be difficult.

[bbc.reporter]

@Schirer. Is Etherdelta also decentralized? Why would they pay fines? Who paid the fines?

These centralized DEXs only market themselves as decentralized. They can be fined, shutdown and banned. They are not decentralized.

Also, was Etherdelta an ICO? You do not have to answer that hehehe. We already know what Etherdelta is.

[Vishnu.Reang]

Sad to see the FBI targeting the decentralized exchanges. They should have left them alone, as they don't do any fiat to crypto or crypto to fiat trading. They are used only for crypto-to-crypto trading. But then, challenging the FBI is not an option, as we have seen what happened to BTC-e after they did so. Anyway, lets hope that there will be a change in the regulations.

[Schirer]

@Schirer. Is Etherdelta also decentralized? Why would they pay fines? Who paid the fines?

These centralized DEXs only market themselves as decentralized. They can be fined, shutdown and banned. They are not decentralized.

Also, was Etherdelta an ICO? You do not have to answer that hehehe. We already know what Etherdelta is.

All of your questions can be answered here in official SEc release :
https://www.sec.gov/news/press-release/2018-258

The short answer is that the owner of ether-delta paid the fines because in the eyes of Sec, he was operating a illegal security exchange.

[gentlemand]

This shows that those exchanges which will remain completely decentralized will be own completely anonymously , most likely will have shit interface and  most liekly will be shady. Otherwise they will risk to have regulators punish them.

A properly decentralised exchange will have no owner. It'll be software that lives in wallet or operates on chain. Until that happens none of these places should be billing themselves as decentralised. They may be non custodial but anywhere that relies on someone owning a domain name and hosting is an inherent weak point that can either be pressured or hacked.

[Ozero]

Decentralized exchanges will be forced to obey the general rules of regulation of cryptocurrency activities, or they need to register in offshore zones. In my opinion, this was to be expected. Cryptocurrency and its owners will constantly be subject to new regulation and this process will only be tightened. States will not be allowed to freely walk a decentralized cryptocurrency, which they cannot control.

[bitcoindusts]

I’m thinking what could be the future of cryptocurrency, supporters want them survive but are being choked slowly by this regulations. This new step may seem to be ok for IDEX according to their statement but it will surely affect their income as well as with other regulated exchanges. I will not be surprised if one day I will hear exchanges shutting down because they are losing clients.

[deadsilent]

IDEX should change its name then😀
It is what it is. They should start complying or stop the operations. Decentralized exchange I think is no future as government starts to crack them down. Anyway, it's still a good move for them. They comply and apply AML/KYC to maintain its operation and also to acquire more valuable cryptocurrencies which are not available on decentralized exchanges.

[bbc.reporter]

@Schirer. Is Etherdelta also decentralized? Why would they pay fines? Who paid the fines?

These centralized DEXs only market themselves as decentralized. They can be fined, shutdown and banned. They are not decentralized.

Also, was Etherdelta an ICO? You do not have to answer that hehehe. We already know what Etherdelta is.

All of your questions can be answered here in official SEc release :
https://www.sec.gov/news/press-release/2018-258

The short answer is that the owner of ether-delta paid the fines because in the eyes of Sec, he was operating a illegal security exchange.

I did not need an answer because we already know what Etherdelta is. It is a centralized exchange marketed to be a DEX. They do not care about decentralization and what it represents. I reckon they only used the word decentralized for marketing.

[bbc.reporter]

News on Etherdelta, it ran an ICO and exit scammed with the funds. I did not know decentralized exchanges can do this hehehe.


Chinese police investigate alleged $176,000 EtherDelta exit scam

The new owners of EtherDelta reportedly ran an ICO and then disappeared, taking the funds with them.

Non-custodial exchange EtherDelta has been reported to police for allegedly conducting an exit scam, according to Dovey Wan, a partner at cryptocurrency investment fund Primitive Ventures. The dispute involves the sale of Ethereum-based tokens native to the exchange, called EtherDelta Tokens (EDT).

Read in full https://decrypt.co/8263/chinese-police-investigates-alleged-etherdelta

[timerland]

News on Etherdelta, it ran an ICO and exit scammed with the funds. I did not know decentralized exchanges can do this hehehe.


Chinese police investigate alleged $176,000 EtherDelta exit scam

The new owners of EtherDelta reportedly ran an ICO and then disappeared, taking the funds with them.

Non-custodial exchange EtherDelta has been reported to police for allegedly conducting an exit scam, according to Dovey Wan, a partner at cryptocurrency investment fund Primitive Ventures. The dispute involves the sale of Ethereum-based tokens native to the exchange, called EtherDelta Tokens (EDT).

Read in full https://decrypt.co/8263/chinese-police-investigates-alleged-etherdelta

Jesus. Just read the article and I'm left in shock. Etherdelta has been going through so many issues, and I thought them paying off over 400,000 in fines would mean they would be much more careful with things - https://www.coindesk.com/sec-charges-etherdelta-founder-with-running-unregistered-securities-exchange

Although to be fair - it looks like the project was sold 2/3 months before the ICO started, seems like it was sold for the sole purpose of scamming investors with an ICO

According to a Reddit post, the non-custodial exchange—which lets users keep control over their funds while trading—was sold in December 2017, shortly before the ICO took place in January, 2018. Once the tokens were sold, the website was abandoned.

Another once-respected DEX that I've personally used falls today - even though they weren't the best owners, regulations and rules are making it harder every day to run a DEX, and I feel like the only way to be safe, would be to never get it registered and associate your real ID to it.