Why KYC is extremely dangerous – and useless

[o_e_l_e_o]

They can use it to commit criminal activities simply by impersonating the person whose data was hacked and open an account under their name through which they can perform illegal activities.

This can be devastating for an individual. Criminals can take out credit cards and loans in your name, and rack up hundreds of thousands of dollars worth of debt which you are liable for. They can file claims under your insurance details (including medical insurance), and again, you are liable for the cost. Even if you manage to convince a court that these charges weren't made by you, which can be very difficult to do, you can be left with thousands of dollars in legal fees, huge amounts of debt, and unable to ever get a loan, credit, mortgage, insurance policy, and so on, ever again. Identity theft can literally ruin your life. It is absolutely mind boggling that people risk this daily so they can get paid a few made up tokens which they won't even be able to sell.

But I'm indeed do some KYC process on some huge exchange such as Binance. I just hoping this one wouldn't be compromise by hackers and steal some vital info of their users.

Too late I'm afraid: https://www.coindesk.com/binance-kyc-issue

But probably they will prefer cash over some info right? but they can have both!

Exchanges often have far more lax security regarding protecting customers' KYC data compared to protecting their money. Lots of exchanges employ very shady third party companies to handle their KYC processes, with entirely expected results. Some exchanges, even major ones like Coinbase, have been caught actively selling their customers' data.

[1714850203]

1714850203

[1714850203]

1714850203

[1714850203]

1714850203

[abdulfatah.busari]

KYC really doesn't make sense, even though the motives behind KYC is good. What then can replace KYC while at the same time serving the intended purpose of KYC without posting harm on its user?

[1miau]

Anyhow, nothing will change.
A million people will come to this topic and say that KYC is dangerous and people shouldn't do it and one day later  999 999 of them will send their pictures, their IDs, their cat pedigree and a list of their's wife girlfriends with who they've cheated for 10 lollapalooza coins.

Couldn't agree more with you. If everyone would stand against KYC, it would MAYBE make a change.

I can buy gold worth $10k from The Netherlands and nobody would request my ID.

It's lowered to 2k a few weeks ago.

But seriously, why should KYC help to prevent terrorism? Or even precious metals or cash? That "argument" is circulating since a very long time, precisely since 9/11. I can't see how KYC should stop someone from getting pilot to kill several thousand people. Where should KYC prevent this? 
Or Nice (France) 2016 where a truck driver killed many people? A strong KYC would have stopped the terrorist?

Someone who wants to do terrorism or crime will always find a solution.

Strict KYC with low limits just affects the nomal users negatively, it's doing far more harm than good right now.

KYC really doesn't make sense, even though the motives behind KYC is good. What then can replace KYC while at the same time serving the intended purpose of KYC without posting harm on its user?

It's a difficult question and maybe also a socially one. When we have a look at Japan, the people are very respectful to each other. Doing harm to the community is extremely despised by the japanese citizens. That's a good attitude when people are living respectfully together and because of that the crime / terrorism problem is very low there - and the society is working without privacy invading measures.

I don't had time to do an analysis but my first impression how that could be achived is:
- wealth distributed equally to all citizens (little gap between poor and rich) => no financial problems to do tax evasion, rob others etc.
- disciplined education
- government acting for the people (not for their own power or the rich) => people would see the state as community, which it should be
- no extremism / racism => no terrorism

Even the ancient romans and greeks didn't have KYC and they survived with much lower knowledge than we have today.

I'm still sure the public blockchains can be an important part of a good solution but for now the "KYC-solution" has failed.
Nobody wants his identity used by scammers to commit crime. 

[Perkjeff]

I read your post and some minutes later, I found this topic on Bitcointalk.

https://bitcointalk.org/index.php?topic=5216868.0

First Post + 3 replies (all from OP) with:

• From first post :

Earn Mining Reward 20% to 30% from CYTT Mining Packages

NOTE: KYC needed to start earning free coins or dividends

• and he is insisting for that, from first reply :

Many people registered in the App, but are not receiving the free tokens because they haven't go through the Authentication process (KYC) yet.
Every user has to Authenticate in the App to start receiving the rewards. This applies as well to the users who decide to purchase the mines to get rewards from 20% per month in CYTC tokens.
The Authentication process is straightforward and normally will be activated within 1 hour from the submission.
You just need to fill name and ID, send a copy of the ID and a picture of yourself holding it.
The Authentication tab is under your profile section.
Happy earnings!

And the guy received negative feedback before.

I'm not saying the guy is trying to scam people, but at least I'm more aware than before on the subject and I will be more careful - seems like I am already actually - thanks to you. Thank you for that.

[Upgrade00]

But seriously, why should KYC help to prevent terrorism? Or even precious metals or cash? That "argument" is circulating since a very long time,

This argument does not hold much water when you critically analyze it. Anyone who really wants to circumvent the KYC process using dubious means can so do. It is the careless individuals who only wanted to claim a few airdrops or bounty coins end up putting up sensitive documents on the web making them vulnerable to the dark web.
The rationale behind it should be the desire of the government to have control over all the financial affairs of its citizenry, hence why KYC is required by all exchanges and other financial websites. Having an entire community transfer funds anonymously with no means of reaching it led to the idea of identity verification.

[MufasaR]

But seriously, why should KYC help to prevent terrorism? Or even precious metals or cash? That "argument" is circulating since a very long time,

The argument has indeed gone on forever and no one will come out with an answer because there is no wrong or correct answer to this question, unless some bias is applied. Though i would like to think KYC was mearnt to vent out some people from either preventing the abuse of a campaign or try and have people that will relate to a product/service(though a questionnaire before kyc process would be helpful )..... cant rule out the fact that some few individuals will data harvest other users information for their own selfishness, whats even mind boggling is BIG cooperations pay handsomely for this data

This argument does not hold much water when you critically analyze it. Anyone who really wants to circumvent the KYC process using dubious means can so do.

true, which is scary if you asked me

Honestly I thought crypto was suppose to kick out KYC with its so called "anonymous" character but no, crypto had to bend down to the rules of FIAT  so as to allow more people adopt it, back in the early days of crypto most services were accessible with a simple sign up now because regulators have infiltrated the crypto system to have society accept it. Good thread OP

[o_e_l_e_o]

crypto had to bend down to the rules of FIAT

Don't conflate all of crypto with these centralized scammy exchanges. Bitcoin hasn't bowed down to anyone - it is still just as decentralized and censorship resistant as it ever was. It is only the centralized exchanges which have sold out the principles of bitcoin and sold out their customers, enforcing these ridiculous KYC demands and deciding what their customers can and cannot spend their bitcoin on.

If you don't like these rules and regulations (and you absolutely shouldn't), then stop using the exchanges which enforce them. If everybody stopped giving their business to these scammy exchanges, then this kind of behavior would rapidly cease. It is entirely possible to buy, sell, trade, spend, and use bitcoin without touching a single on of these centralized exchanges or giving away your KYC documents to a single service.

[Ukraina]

This article is long and detailed analysis and evaluation of KYC. Since 2017, when trading platforms and platforms in blockchain fields appeared, it has led to a lot of bounty programs for bounty hunters.

KYC is required and it limits many virtual users, bots, etc.However, KYC information issues of users are not strictly managed and there is no commitment to the records. KYC. The leakage of user information occurs regularly, users when KYC is not guaranteed damage to privacy, ...

Avoid KYC for everything else:

No KYC for altcoin / shitcoin bounties or altcoin / shitcoin airdrops where the owners are likely scammers or incompetent.
No KYC for shitty exchanges where the owners are likely scammers or incompetent.
No KYC for low amounts of money where it’s just not worth the risk (this probably includes everything that doesn’t make you rich)

I agree with this opinion, there are many cases of unnecessary KYC, in some cases, the developer only wants to collect the user's information through KYC and sell it out.

[MufasaR]

crypto had to bend down to the rules of FIAT

Don't conflate all of crypto with these centralized scammy exchanges. Bitcoin hasn't bowed down to anyone - it is still just as decentralized and censorship resistant as it ever was. It is only the centralized exchanges which have sold out the principles of bitcoin and sold out their customers, enforcing these ridiculous KYC demands and deciding what their customers can and cannot spend their bitcoin on.

Are you saying exchanges are the biggest crypto service providers that have most of the  influence on whether KYC should be done or not ?
Thought gambling is one industry that has adopted this KYC culture which imo is hurting their own businesses in the long run

[o_e_l_e_o]

Are you saying exchanges are the biggest crypto service providers that have most of the  influence on whether KYC should be done or not ?

Exchanges are certainly the biggest service providers in terms of volume handled in the crypto-space, but I wouldn't say they have much influence. Most of them are just complying with laws which are being enforced by various governments or organizations around the world. There are certainly ways that exchanges can function without having to ask for KYC - look at some of the good DEXs, for example. But centralized exchanges don't want to transition to that model because it would affect their profits. So instead they sell out their principles and sell out their customers to keep their own bottom line intact.

[LbtalkL]

Thanks for the information, I just wanna share my inputs to this thread. I suggest not to try KYC with websites that do not have a third party KYC Service, having a third party service will make your mind at ease but of course, a reputable service just like Binance is using "Refinitiv" is decent one. A website that does not have this service or similar is suspicious and our data is in danger. Some bounties here on Bitcointalk only using a google form for KYC details that is very dangerous for us so don't you ever try it.

[zasad@]

Russian translation
https://bitcointalk.org/index.php?topic=5222690

[Febo]

Man, if regulations in country you live in demands KYC you simply have to do it.  What you can do is to do it where you trust that company to keep your data secured as much as possible. And to avoid service you need doing KYC for, unless you really need to use it.

[akirasendo17]

Kyc have some good side, but mostly if its turns out to be in the hands of bad people things are going from good to worse
why? informations are there which can be use for fraud acts, also can be use to steal money, because of this information,  I dont agree that its useless because as I said there are good use , example are for bank, this will be use for securing you account, yes its also a kyc, also its a protection example if your account been hack, you can use it to protect or open your account

[o_e_l_e_o]

I suggest not to try KYC with websites that do not have a third party KYC Service, having a third party service will make your mind at ease but of course, a reputable service just like Binance is using "Refinitiv" is decent one.

Why is a company using a third party service safer? I'd argue the exact opposite. Companies often tender this out to the lowest bidder, who invariably have very poor security. It also means your KYC documents are being shared around with more people and with third party companies, so there are more opportunities for a malicious employee to access them or a hacker to steal them. Your Binance example is a poor one considering they were hacked for thousands of users' documents and information just a few months ago.

[BITCOIN4X]

I agree with what you have explained about KYC from the perspective of sensitive data. There is no guarantee that data will be forever safe for third parties and users may not be able to control the data they have submitted whether or not it has been used by others.
So far I have never used my sensitive data for ICO, Bounty and exchanges that have a bad reputation. I only send KYC on the local exchange and it is needed because this exchange helps the government to prevent illegal actions such as money laundering.

However, I also do not know for sure whether my personal data is also used for other things or not because so far I have not had a problem related to the use of personal data.

[joniboini]

However, I also do not know for sure whether my personal data is also used for other things or not because so far I have not had a problem related to the use of personal data.

You don't know because they won't tell you. Have you ever wonder why the ads on your browser show products that you're interested in the recent weeks? That's one of the results of this data collection thing.

Because there is no way you can verify whether they use it for good or bad purposes, you should never do it unless it is extremely necessary. Don't do KYC on a fairly new exchange with ambiguous privacy policy and registered on an off-shore address for example.

[Perkjeff]

French Translation

https://bitcointalk.org/index.php?topic=5222860

[Saint-loup]

You should write a shorter version if you want your text to be shared and translated (and read) IMO. I'm sorry but I found it very long for this kind of subject, some arguments are repeated several times in the text.

BTW Why not launching a petition on change.org?

[Harlot]

At the end of the day KYC is something we can't escape so really the only way of protecting our personal information is to whom we are handing out with. 1miau did a really good point on saying you just don't give your KYC to any kind of service and project out there since you can't really trust all of them especially the ones who have a shady background. At least with the reputable ones the only concern you can have when it comes to KYC is from leaks and hacks from happening in their exchange which I think is the best option you have when it comes to the crypto industry. Not unless we have some new and enhanced level of regulation when it comes to KYC safeguards from these services we cannot expect our data from leaking somehow.