Kyc is deceitful if ignorant of the bad side

[Charles-Tim]

I have this in mind few weeks ago to create a topic about kyc on exchanges, but not limited to exchanges but all other platforms that enforce kyc before users can be able to have access to their products and services.

Note that buying verified account can lead to scam, I mean the account seller can scam you. Also the account can be blocked and require you to prove you are the real owner which can lead to money loss. Also know that the online criminals are are the ones that know the way to go about this as they are smart enough to fulfill their mission before anything suspicious surface. Also know that your bitcoin and other funds on centralized exchanges are not yours on blockchain, you have no full control over your own coins, the exchange has the full control.


Kyc is extremely dangerous, but not to the bad actors as they are the criminals making use of fake information for kyc purpose and they are using it for fraudulent activities. So, the good people are just collateral damage of the bad actors fraudulent activities while the bad actors are still seeing successful solutions to execute their plans. To know more about this, you can read the below article about how the bad actors still able to make use of fake verification.

For $200, You Can Trade Crypto With a Fake ID

“It’s a vulnerability KYC systems have. If you know how to generate [synthetic] data, you use it. KYC systems are not a customs checkpoint with a shared database and verified information about any potential user,” they said.

In another post, the vendor describes software that allows the creation of fake selfies, including video. “We do live selfies. 3D biometric is possible for us. take photos with id cards. print any docs. we can be anyone you need,” the same vendor advertised on the paid forum Ver.sc.

CoinDesk reviewed a sample of accounts at exchanges Binance US, Coinbase Pro and Kraken and payment services Cash App and Wirex that were available for purchase on the black market. The accounts had been put up for sale by several different vendors. The prices of these accounts ranged from $170 to $250, all paid in bitcoin.

Along with login credentials, these accounts came with private data of the purported account owners, all of whom appeared to be genuine U.S. or European Union residents. The data included dates of birth, street addresses and, in the case of the U.S. residents, Social Security numbers.

After reviewing the accounts, CoinDesk contacted the crypto exchanges and payment services to check their authenticity. None of the companies would say whether the accounts were genuine, explaining they can’t comment on individual accounts.

CoinDesk searched online databases such as Spokeo, SearchPeopleFree and ClustrMaps and found four people whose names, years of birth and cities matched those on the black-market accounts. Two of those people had matching street addresses as well.

Attempts to contact these and other individuals whose names were on the reviewed accounts by phone, email and social media were unsuccessful, and CoinDesk has mailed them letters to alert them their data is potentially being abused.

Some people are traders, people can not completely remain anonymous due to one reason or the other best known to individuals. But people should not think that centralized exchanges can not be used for criminal activities. People need to think if it is necessary to give out their personal information to centralized services, it is not worth it if not necessary. The most important of all is to know how to avoid bad actors, do not think centralized services give any protection than a way to reveal your information to other bad actors during kyc breach that can lead to phishing attempts and malware attacks.


This is not about account sales, it is about the cons of kyc, expect scam if trying to buy a centralized exchange account, or blocking/freezing of account. It is not your key, it is not your coin, avoid account buying to avoid scam.

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[Nathrixxx]

Atimes we intend to look for trouble while everything is working perfectly as expected, life has it own rule of game which is don't expect harvest where you don't plant, if you buy an existing account from someone with the mentality to bye cut the due process or kyc terms not knowing how the account was built, its kyc details, activities carried out on the account and how to maintain the account will be a challenging threat to the new user, going by instructions and due process required to build up a new account is what should be priotized for at first, buying an existing account if traced and tracked down on a criminal record and activities then the new user will pay for the consequence.

How on Earth can you accept someone's biodata informations yours?
Why can't you be patient and buid your own account reputation?
It is also believed that customer's kyc informations should be secured with any third party agent as individuals right for privacy should be maintained according to the law.

The rule is simple:
Work hard
Earn from your labour
Build a reputation
Develop trust in yourself
Increase you capacity
Learn and make research
Avoid hastening/rush
Dont be greedy
Buying an existing account can cost you more than it can pay you.

[SquirrelJulietGarden]

Not only this. With the growth of technology, nowadays we are using many applications with QR codes. I am witnessing many people are proud of themselves when they share their QR codes, for vaccination like applications for Vax pass. I don't know how our information is encrypted in QR code of those applications. If they simply turn our information to QR code without a preliminary step to encrypt it, the QR code is too sensitive.

I meant people are readily to share their personal information and are not aware of risk.

[ShowOff]

Scam can happen anywhere and anytime as long as we don't take precaution and are aware of all the possibilities. Buying verified account "trading account" from other users in my opinion is not a good idea in preparation for trading activities because there is still a possibility that this will lead to scam. If they don't like to use personal identities on exchange then I think they can still trade on decentralized exchange "P2P exchange" instead of having to buy someone else's verified account for a centralized exchange.

[jrrsparkles]

Anything we upload on the internet becomes vulnerable no matter whichever site we are using and how trusted they were because we have seen that even the website with the most security has history of hacks.

However if KYC with basic information still leads to the illicit activities then it will evolve to the next level for example holding ID with a selfie for the verification already implemented on many sites and we can expect such kind of verification on every exchanges as well.

[NeuroticFish]

* If one uses other person's KYC, the other person (original) may "recover" the account at some point and steal the funds

* If one uses counterfeit KYC, he may get account closed and even face criminal charges

---- so beware of bought KYC

* If one uses his own data for KYC, bad actors may sell it for various uses, some good, some very bad (one worse case can be even getting loans from bank in your name)

So yeah, KYC is just beautiful.

[mu_enrico]

KYC is mandatory, doesn't matter if you hate it, you must do it even in Binance because of the regulatory pressure. We live in the world that has law and regulation (aka government) not anarchy, so there's nothing we can do. Also, it makes sense if KYC is there to prevent money laundering, terrorism, etc. If there's no KYC, then criminals and corruptors will get the most benefit, not average people. Instead of fighting KYC, which is useless, what you can do is selectively pick service you trust to hold your KYC data, except you are an internet freedom fighter who wishes to delete KYC requirement. If that the case, I wish you good luck.

[Charles-Tim]

KYC is mandatory, doesn't matter if you hate it, you must do it

Kyc is not mandatory so far you do not use the exchanges that are demanding for kyc, so implying it is mandatory in this regard is not absolutely correct, but only mandatory on the exchanges that are enforcing it, but not still necessary to use such exchanges.

Also, you are a bit off-topic, This is not about kyc being mandatory or not, it is about bad actors using it successfully to exucute criminal activities, that people should still always be careful and learn ways to avoid being scammed.

[mu_enrico]

Also, you are a bit off-topic, This is not about kyc being mandatory or not, it is about bad actors using it successfully to exucute criminal activities

Nope, mandatory or not is just one line of my comment.

Kyc is extremely dangerous, but not to the bad actors as they are the criminals making use of fake information for kyc purpose and they are using it for fraudulent activities. So, the good people are just collateral damage of the bad actors fraudulent activities while the bad actors are still seeing successful solutions to execute their plans.

KYC can be dangerous for both, for users if the service providers have crappy security. And for bad actors/criminals, well, pretty sure it makes their life more difficult.

it makes sense if KYC is there to prevent money laundering, terrorism, etc. If there's no KYC, then criminals and corruptors will get the most benefit, not average people.

Thus, the view that (as if) KYC has no merit except to be used by bad actors isn't entirely true. Perhaps you don't think that way, but the phrasing/words sound like not come from a neutral position.

Kyc is not mandatory so far you do not use the exchanges that are demanding for kyc

True.

Instead of fighting KYC, which is useless, what you can do is selectively pick service you trust to hold your KYC data

[o_e_l_e_o]

You see the statement that KYC in crypto exchanges and services helps to prevent money laundering, scams, hacks, thefts, etc., very frequently on these forums, but never once have I ever seen any data to support that claim. I've brought this up a couple of times, but again, no one has ever provided any data or evidence. I am very skeptical of this claim for precisely the reasons pointed out in the OP - a criminal can buy multiple verified accounts or fake KYC data for trivial amounts of money. In general criminals aren't stupid enough to try to launder large sums of money through accounts directly connected to their real identity.

It's very similar to the people in government and three letter agencies who claim that mass surveillance is helping to prevent terrorist attacks, despite there being absolutely no evidence that mass surveillance is effective at preventing any crimes whatsoever.

[Darker45]

All those who are using centralized exchanges but hate KYC should realize that what they are getting into is the exact thing they are avoiding. The logic is very simple. If you hate KYC, avoid centralized exchanges.

The likely reason why a lot of people are drawn by this fake KYC market is that they don't want to undergo KYC. The problem, however, is that despite their hatred against KYC, they are using centralized exchanges. Whether or not a CEx is offering a certain deposit and withdrawal limit for unverified accounts is not the issue. It only takes a seemingly insignificant action for the KYC requirement to get triggered.

[kelonmusk]

Misuse of personal data such as (KYC) is very common, not only in the crypto world or the real world. actually very risky. generally the original owner will never know if their data was misused or otherwise? I'll be honest with the "bitcoin" community here, Don't be careless to give ID just for the little things, I mean in terms of claiming prizes including airdrops. let's say $ 30 or even a nominal smaller or greater than that. I suggest you better ignore it.
a little story, I am a good person who is hurt but cares about the environment. currently I'm doing business on blockchain including ICO service since 2014 and also in illicit business (FH II) but unfortunately the site has been closed since 2017. Did you know that every 1 ID data is priced around $100 - $300. Just imagine if I do it with hundreds if not thousands of IDs, how much do I make? but I made up for it by giving 50% to people who need money.

[Luffygroove]

The crypto world is a mean world. It is common that people to do anything to gain profits. Crypto is known for the big profits, so it attracts every single people who want to speculate their fate whether it's honest people or criminals. Criminals always thought about how to get an easy way to gain as many as profits with a little effort. Scamming, cheating, hacking are some efforts they do to rob people. Everything could be a chance to get money and honest people will always be the victims. The institutions not always be the injustice doer (exchangers, developers), but they also can be the victim. Even, the institution's deceivers not only do that individually, sometimes they're organized and systemized also belong in one big institution.

KYC was a problem from a long time ago in the world where decentralization should be implemented in cryptocurrency. Many people try to hinder it and some other people look at this as a chance to gain profits. Criminality not only exists just because of the criminal's intention but also cause there's a chance to do it.

[o_e_l_e_o]

Whether or not a CEx is offering a certain deposit and withdrawal limit for unverified accounts is not the issue. It only takes a seemingly insignificant action for the KYC requirement to get triggered.

Agreed. The days of non-KYCed accounts on centralized exchanges are numbered. We've recently seen lots of exchanges slash their withdrawal limits and trading limits for non-verified accounts. They can and frequently do lock accounts and demand KYC, often citing no reason at all other than that the user has triggered some unknown compliance algorithm or something similar. Soon enough, it will be impossible to use centralized exchanges at all without completing KYC. If you want to avoid KYC, then the only reliable option is to use a good DEX instead (and not a fake scam not-really-a-DEX which demands KYC anyway, like Binance "DEX").

generally the original owner will never know if their data was misused or otherwise?

They will know when law enforcement show up at their door because a few hundred bitcoin were laundered using accounts in their name. Or maybe when they get a bill from a bank to repay a few hundred thousand dollars worth of loans and credit cards which someone else took out in their name. Or maybe a bill from an insurance company because someone used their medical insurance. There are a lot of very expensive potential consequences to having your KYC data stolen.

[lovesmayfamilis]

Already many times on this forum, they wrote that providing complete information about yourself on the Internet can further adversely affect the person himself. But I also very often come across statements from those who claim that they have nothing to hide, and therefore they are not afraid to go through KYC and share their documents everywhere. In addition to the fact that the Internet itself collects information about users from all sides, we also discover the most intimate places in our lives, going through KYC, participating in social networks, and then we begin to bitterly indignant, where after we receive receipts for non-payment of any loans, loans and a lot of interest from fraudsters.
No need to naively think that if someone takes your documents, he will subsequently be unable to do anything with them. Just head over to the darknet forums for fun. You will be unpleasantly surprised how much and how cheaply any documents are sold for passing any KYC.

[TheNineClub]

The criminals are not the only ones to blame. People or organizations that buy data from those criminals have to also take their share of responsibility. Where there is a demand there will be a need to supply that demand. We need to first and foremost discourage such data collecting and verified account purchasing. Then and only then will this cease to be an issue. If we only disregard KYC and stop using it altogether, then criminals and purchasing partys will find other ways to obtain what they need.

[SquirrelJulietGarden]

All those who are using centralized exchanges but hate KYC should realize that what they are getting into is the exact thing they are avoiding. The logic is very simple. If you hate KYC, avoid centralized exchanges.

Centralized exchanges are toxic because of requirement on KYC and custodial wallets.

It is not always true but when you choose and use DEX, you can choose and use non custodial wallets and be your own bank.

Hence, if you hate both KYC and custodial wallets, why do you choose and use centralized exchanges.

[witcher_sense]

But I also very often come across statements from those who claim that they have nothing to hide, and therefore they are not afraid to go through KYC and share their documents everywhere.

Those who claim they have nothing to hide because they are not criminals think it is well acceptable to share your real name, your address, your transactions with anyone who asks on the Internet. I have a hunch they will change their minds once KYC data is leaked or sold to third parties and real criminals come and try to rob them. What I think is that such a state of affairs makes KYC regulations and procedures dangerous for non-criminals and beneficial for criminals. Shouldn't it be quite the opposite? If the goal is to protect honest people from hackers and criminals, then it makes no sense for exchanges to collect sensitive information that can be used against non-criminal people.

[willhuber]

The development of technology is good, but being ignorant about the risks and implications of the technology could be bad. People should think before sharing any personal information.

[IIrik11]

I agree, KYC is evil and should be avoided at all costs!!   

Sooner or later all the information you provide to these exchanges is going to get sold on black market.

Then someone else will use your credentials to perform online operations.

And if so happens that they do anything illegal.

Your data will be attached to it and you'll end up in much trouble.

So, just please stop using exchanges/services with KYC.