Why KYC is extremely dangerous – and useless

[Subbir]

At first KYC was excellent but later KYC became very dangerous I even have never used KYC since the start it seemed fake to me. they struggle to hack the ID with our personal information. That's why we should always all be vigilant and keep everyone faraway from KYC.

[XCANA]

I have been wondering how possible can I ever make a KYC for cryptocurrency because that's the worst things I have ever heard from people who believed in anonymous but later turned to KYC. This action is bad and can land any individual into jail, we have heard series of hacks whereby hackers gained access to the database to stole whatever in the database. Many of these KYC done on these affected exchanges or gambling platforms stand a risk to be jail for what never happened to them per se. I hate KYC and won't encourage anyone to participate in the act.

[akirasendo17]

its extremely dangerous since it really expose your identity, specially information the may lead you be a target of hackers , and we know that the information that we are giving is very critical, since this info are also being use in the banks, by a lot of people, hackers can take advantages of the info,
giving your info or selling it, this also can happen, i see a lot of group selling information's for companies the offers credit card and health cards and its annoying i know everyone experience this,
great topic i hope to see more

[Bacchu]

At first KYC was excellent but later KYC became very dangerous I even have never used KYC since the start it seemed fake to me. they struggle to hack the ID with our personal information. That's why we should always all be vigilant and keep everyone faraway from KYC.

Personally I dont like to do KYC for any kind of bounty project. But I like to do KYC for exchange platform like binance,bittrex because it has huge advantage. you can withdraw huge amount of btc/crypto and your problem within the exchange will be solve easily. so its good to do KYC for exchange. but for bounty project its not good at all. because most of the bounty project are fake and they are just trying to collect our personal data and so why KYC is very risky for us.

[Pmalek]

Personally I dont like to do KYC for any kind of bounty project. But I like to do KYC for exchange platform like binance,bittrex because it has huge advantage. you can withdraw huge amount of btc/crypto...

I'd say it depends on how much you need to withdraw on a daily basis. Since you mentioned Binance, they have a a 24-hour withdrawal limit of 2 BTC. For most users this is enough. Do you honestly need to withdraw more than 2 BTC per day that would justify going thorough KYC?

[noahark]

its extremely dangerous since it really expose your identity, specially information the may lead you be a target of hackers , and we know that the information that we are giving is very critical, since this info are also being use in the banks, by a lot of people, hackers can take advantages of the info,
giving your info or selling it, this also can happen, i see a lot of group selling information's for companies the offers credit card and health cards and its annoying i know everyone experience this,
great topic i hope to see more

This is absolutely true!
And we have been many cases where data have been leaked and who knows what the hell  happens with these huge data.

Few cases:
https://www.infosecurity-magazine.com/news/data-leak-password-reset-crypto/

https://cointelegraph.com/news/bitmex-email-data-leak-fallout-is-serious-many-users-already-affected

My opinion is that crypto exchanges should be more focused on security than on KYC.
But well, KYC is needed also to fight against things like AML.
It's complicated situation.

[bakasabo]

Personally I dont like to do KYC for any kind of bounty project. But I like to do KYC for exchange platform like binance,bittrex because it has huge advantage. you can withdraw huge amount of btc/crypto...

I'd say it depends on how much you need to withdraw on a daily basis. Since you mentioned Binance, they have a a 24-hour withdrawal limit of 2 BTC. For most users this is enough. Do you honestly need to withdraw more than 2 BTC per day that would justify going thorough KYC?

But I've passed KYC on Binance just to be sure to have some instrument that my account is mine. Imagine some steal access to your account (probably got access to your mail, but keeps silent about it). How can you prove that this is your without giving any kind of person identification to exchange.

[o_e_l_e_o]

My opinion is that crypto exchanges should be more focused on security than on KYC.

Good security is expensive. Exchanges don't want to spend money and lose out on profits. We have seen time and time again that exchanges can be subject to huge security breaches and lose thousands of customers' KYC data, and people don't care. They will continue to use them and continue to trust them, even though they can't be trusted. Why would an exchange spend all that money on good security for their users, when their users will continue to use them regardless? So instead they opt to tender their KYC processes out to the lowest third party bidder, with predictable results.

But I've passed KYC on Binance just to be sure to have some instrument that my account is mine.

This is a poor reason to complete KYC. If you have different, strong passwords for both your email and your Binance account and use a secure method of 2FA for both (not SMS or SIM based), as well as practicing basic security practices such as not logging in on public computers, then the chances of your accounts being hacked are minimal. If your Binance account was hacked, then you should be able to recover it from your email address.

If your account was hacked, and any coins you had on it stolen (although they shouldn't be since you should be storing all your coins in your own wallet), then what good is recovering the account anyway? You won't get your coins back. Risking your KYC documents for this reason is pointless.

[bakasabo]

But I've passed KYC on Binance just to be sure to have some instrument that my account is mine.

This is a poor reason to complete KYC. If you have different, strong passwords for both your email and your Binance account and use a secure method of 2FA for both (not SMS or SIM based), as well as practicing basic security practices such as not logging in on public computers, then the chances of your accounts being hacked are minimal. If your Binance account was hacked, then you should be able to recover it from your email address.

If your account was hacked, and any coins you had on it stolen (although they shouldn't be since you should be storing all your coins in your own wallet), then what good is recovering the account anyway? You won't get your coins back. Risking your KYC documents for this reason is pointless.

I've got your idea. Maybe passing KYC on Binance was not the best idea after all. But what about situation when your mobile with 2FA is stolen. How can you recover access to your account ?

Anyway, I will never pass a KYC for a bounty reward or something that I wont use often.

[o_e_l_e_o]

But what about situation when your mobile with 2FA is stolen. How can you recover access to your account ?

You should be using an open source 2FA authenticator app which allows you to export your encrypted database as a back up, such a Aegis or andOTP, and not Google Authenticator, which is the worst 2FA app out there. If your mobile with 2FA is stolen, then your accounts shouldn't be compromised because the attacker does not know your passwords, and you can still access your accounts by restoring from your 2FA database back up.

[Vazriel]

I found this thread to be extremely informative and helpful OP. I truly wish more places and people would take a similar sentiment on the current "accepted" KYC "standards". I will be directing the companies and business who are demanding KYC from me to this exact post. Wonderful read!

[Tytanowy Janusz]

Great work @1miau. If you don't mind i would like to do Polish translation.

There are probably millions of KYC data sets on the black market, with this number increasing daily as KYC enforcement becomes more widespread.

I will quote my post here that i made for a guy who was pro restrictions and pro KYC:

~50$ - that's how much you need to pay for KYC photos on darknet.
~100$ - that's how much you need to pay for credit card that is registered on random guy.

Also ICOs scammers has thousands of ID from their KYC that they demanded from their clients. Sometimes i think that this is a main income from today's ICOs. You get 1000 bounty hunters that perform KYC to get reward and you have 50 000$ from darknet. You don't need to sell even a single token during ICO.

Any restrictions will only makes things harder for honest guys. Scammers will always find a way to scam.

And actual data right from darknet:

By the way, do you have a source where we can see this tyranny scandalous activity of selling KYC information is happening?

I will not share darknet market links here because i don't know if its not against BTT (and personally i don't want to promote that) rules but i can link you this article to prove that I didn't made it up:
https://www.ccn.com/hacked-customer-data-from-world-leading-cryptocurrency-exchanges-for-sale-on-the-dark-web/

And photo of random vendor selling KYC data:


And if some may think that exchanges need photo with you holding a piece of paper with date than you need to know that 100$ is enough for fake ID.



So as I already said. Any restrictions will only disturb honest users. Every KYC, every coin holding if they are tailed with scam etc. Scammers will always find a way to scam and wash dirty money.

Scammers have fake IDs, KYC data, they sell OTC - P2P, they spread it through dozen of exchanges and cantors they may even use it to pay for signature campaigns for they current business (casino, exchange). It is possible that your address is already tailed. It is possible that they have their own exchange.

In present world you don't even need to collect single $ from ICO to call it successful. All you need to do is no-KYC bounty and change it to KYC bounty after 2 months.

[mirazlama8]

Off course kyc could be risky factor our data could be used in wrong purpose if the website that we had done a kyc being fraud than it ws not good for us....

[nomenclatur]

I myself do KYC while buying ico in years 2018 if secure my data I do not quite know that KYC be misused someone irresponsible when I read this thread I realize that personal documents are very important and very dangerous if it is owned by the bad guys and used in any use for the benefit of crime.

[psycodad]

Sometimes it is unavoidable to go through KYC, but it is extremly important to check the party to which you submit your documents beforehand.

I guess for some exchanges KYC is just an alternate income stream (by selling this data) while other exchanges indeed just try to comply with the law.

One extreme example I encountered is Crex24 for which I created a Scam accusation recently after they suddenly and out of the blue went "you need KYC to withdraw":

https://bitcointalk.org/index.php?topic=5243879

[tvplus006]

Personally I dont like to do KYC for any kind of bounty project. But I like to do KYC for exchange platform like binance,bittrex because it has huge advantage. you can withdraw huge amount of btc/crypto...

I'd say it depends on how much you need to withdraw on a daily basis. Since you mentioned Binance, they have a a 24-hour withdrawal limit of 2 BTC. For most users this is enough. Do you honestly need to withdraw more than 2 BTC per day that would justify going thorough KYC?

The need to pass verification on Binance is not only to increase the daily limit for withdrawing money. Passing KYC allows you to use additional services of the exchange. Only after verification you will be able to take advantage of margin trading and futures. In addition, you will be able to restore your account if you lose access.

[Negotiation]

Off course kyc could be risky factor our data could be used in wrong purpose if the website that we had done a kyc being fraud than it ws not good for us....

KYC is much riskier and more likely to be a victim of fraud The reason KYC is dangerous is that we don't have personal information and there are many KYC who do not have wallet keys and hack our wallet I was once the victim of this deception. Therefore, it is better not to do KYC to protect your data from the websites that ask you to do KYC.

[20kevin20]

I myself do KYC while buying ico in years 2018 if secure my data I do not quite know that KYC be misused someone irresponsible when I read this thread I realize that personal documents are very important and very dangerous if it is owned by the bad guys and used in any use for the benefit of crime.

PM me a copy of your ID. I swear it will never be misused.

You wouldn't do that, would you? Why would you give it to somebody else? Whether it's a small company, a corporation or simply a person, just why? Moreover, why do you have to give it after registering and depositing funds on most websites?

You could deposit 1 BTC on a website and I may have the password of it and complete KYC to withdraw your money from your accounts into my wallets and nobody would suspect a damn thing, I mean.. "you" have completed the identification process, haven't you? Besides IP, how would Binance know that the guy who completed KYC after their account activity turned "suspicious" is the same guy who registered?

It's just plain nonsense and too many are taking advantage of it. But it's only me and a handful of others complaining about it, everyone else says "well you should give it if you really have nothing to hide" .. -insertEdwardSnowdenquotehere-

KYC makes no sense. On "black" market it's easy to purchase KYC pass. Not necessarily stolen, just people who willingly sell their info to make some money.

Let that be their personal matter. If you'd like to sell your hands to somebody 'cause you want to make money off them, then feel free to do it. They're doing that as they will to, but nobody tells you about the dangers of KYC before registering everywhere. All you're being told is, "obey the law".

[Sk_Ezaz]

Almost platform are posing for KYC which is basically annoying and crypto currency not designed for this type of KYC processor. However, I forced to submit KYC on Bittrex for withdrawals once they were implemented KYC policy. As I remembered, I even have submitted KYC on Hitbtc & coinbase and also some exchangers.

[masulum]

It seems to me that very soon it will become a mandatory procedure for all exchanges, trading platforms, and possibly for the entire Internet!

AFAIK, Binance one of exchange that not asking KYC for members who not needed to withdraw more than or equal 2 BTC/day. It's mean, if you are joining in exchange that asking KYC to activate your account, you should avoid them. How to do this, you can join them, but don't use real personal information first. Or, if you want to play safely, you can try to search/ask in the forums before join and find information about KYC on exchange you want to join. This exchange list articles^[1] can be an option that not asking KYC as mandatory for members.

^{[1] DYOR/DWYOR}