KYC is not enough, Bad actors are everywhere

[Cookdata]

I greet everyone!
Bad actors in cryptoland are a constant threat, you must maintain vigilance in all you do.
I want to share something with the community that happened in a peer-to-peer transaction when I attempted to convert my BUSD to fiat.

First, I'd like to quote one of the top members here, Charles-Tim, from one of his posts.

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.

KYC is actually good, it reduce the rate of criminality and fraudulent activities but that doesn't mean you and I are completely safe and the same time, KYC is bad and not good for exchanges, the person you trust today may turn out to be the must dangerous scammer you will ever meet.
A scammer can get your attention, win all your trust and everything just to get back at you and by the time they attack you, it will be once and when they do, they make sure they completely drain you of all your pocket. This is what some scammers has been doing in p2p communities especially Binance exchange.

I have been using Binance p2p quite for some time now and I am very familiar with their ways of informing everyone on how to trade safely, the pros and cons and how to detect and report scammers, despite the KYC and other information required by Binance, some guys always know their way out of tight security.


This month on the 2nd of October, I wanted exchanging few amount of BUSD on Binance p2p and the requirements on the exchange before accessing p2p was that you need to be KYC verified, Email and SMS verified before you can become a Marchant on the exchange, this is the only way to trade NGN fiat since fiat deposit and withdrawal has been hanging for months now due to government interference.

The first thing I needed to do was to select a Marchant that I wish to trade with and after searching, I was satisfied with this guy since his 30 days trade is almost a thousand plus (1573), that's quite a busy merchant(buyer/seller)



So, after checking his statistics, I was convinced with his terms and conditions, satisfied with the dollar rate and then I proceeded to exchange 55 BUSD at dollar rate of 535, I filled my account number and name and was waiting patiently for the buyer to send me the money as agreed on the rate.



Just 2 minutes of setting the trade, I received an sms that the user has sent me payment which of course is the norm thing traders do immediately they come online when they are notified about a trade, some do click sent so that the timer wouldn't beat them (Binance always set a time for each trade, if it's doesn't get done in 15 minutes, it automatically get cancelled) but this is where some bad actors make bad moves.

Immediately, I checked my Mobile App to confirm the payment he claimed he sent since I never received any sms alert, lo and behold, my account was broke, no alert seen or any fresh transaction. I chatted him immediately that I am yet to receive any cash.




His response was quite fast and he told me that he already sent the payment, that I should check again that he already made my payment since. This time, I was worried that it may be due to network issues, some inter bank transactions can waste your time.



I double-checked my Mobile App for payment confirmation, but nothing had arrived. I rushed to Binance to inform him that he needed to wait for me to receive alerts before releasing the busd to him, but I was taken aback by the fact that the guy had cancelled our trade for which he claimed to have sent me money.



I was in awe at that time, so I told him I'd report him to Binance, but he never responded, never provided me an explanation for why he terminated our trade, which he said he sent me money.


So many thoughts were going through my mind, why will a buyer cancel a trade that he claimed that he sent me money?

• Could it be that the buyer never sent the money and wanted to play smart?
• Why would a verified person would want to scam?
• How many traders would have actually been of this kind trap if they sent the Busd without making confirmation.

I had many thoughts on mind but one that actually answer the question is that, KYC is never enough and can't stop any fraudulent act if they want to play smart, scammers are out there and they are developing new ways to get Maga (the innocents) that comes their way.

[20kevin20]

I had many thoughts on mind but one that actually answer the question is that, KYC is never enough and can't stop any fraudulent act if they want to play smart, scammers are out there and they are developing new ways to get Maga (the innocents) that comes their way.

This is exactly why KYC is useless and dangerous. If it doesn't do enough, it's not worth it imo to trade your personal information for something that doesn't even do what it's supposed to do. Your personal information is worth more than an account limit change and since we have decentralized exchanges, wallets etc I don't even see the point in completing KYC procedures.

Scammers will exist. They'll keep existing, even with the harshest rules out there. Thieves existed even when capital punishment in public squares was a thing, which shows that nothing is ever going to stop some people from doing this stuff. What this thing truly does is, it invades our privacy and strips us off a lot of very valuable information that is ultimately only useful for surveillance, control and .. perhaps hackers who get to leak and sell these databases to worse actors which now puts your security under risk.

Think about Ledger's leaks and how many people have been phished afterwards. Think about those who received weird Ledger Nano X boxes that were supposedly "free gifts from Ledger" which turned out to be scams. Had people not given real information to Ledger, this would've been avoided. What KYC does is it puts you under danger.

[Jawhead999]

• Could it be that the buyer never sent the money and wanted to play smart?
• Why would a verified person would want to scam?
• How many traders would have actually been of this kind trap if they sent the Busd without making confirmation.

1. Very possible, if he's legit user why does he need to cancelled the trade? It's mean there's something wrong/suspicious behind of his motive.
2. He could bought that's account, so even though Binance has their identity it's not him but it's previous owner. Or he could use fake KYC, trading KYC is nothing new here. Most of people interested to trade his KYC only for $5-$50 especially for third world countries.
3. We can't count them, but I believe there's a lot newbies got trapped.

Suggestion : You need to resize your images.

[Cookdata]

But based on rest of your post, you're implying that KYC does more harm than good things. KYC stop few scammer, but it compromise privacy of all users while more vigilant scammer could use stolen account/legal document to bypass KYC verification.

I have edited the previous sentence, it's supposed to be kyc should be discouraged.

Suggestion : You need to resize your images.

I have resize the images. Thanks.

[TheNineClub]

KYC is being used and abused for all the wrong reasons. But once crypto stabilizes (and it will), we will be seeing much fewer scammers floating around trying to catch people in such a manner. Scams will then probably become more complex more subtle. Maybe, someone, will one day write a book and the history of crypto scams XD From a Nigerian Prince to institutionalized scamming.

[Charles-Tim]

We need to be careful of centralized platforms, KYC does not mean bad people can not make use of fake identities to scam.

I have resize the images. Thanks.

How about this size

Code:

[img width=300 height=400]https://i.ibb.co/q0tjMj5/Screenshot-20211026-074119-1.jpg[/img]

[coupable]

I had many thoughts on mind but one that actually answer the question is that, KYC is never enough and can't stop any fraudulent act if they want to play smart, scammers are out there and they are developing new ways to get Maga (the innocents) that comes their way.

This is exactly why KYC is useless and dangerous. If it doesn't do enough, it's not worth it imo to trade your personal information for something that doesn't even do what it's supposed to do. Your personal information is worth more than an account limit change and since we have decentralized exchanges, wallets etc I don't even see the point in completing KYC procedures.

I agree with you that KYC policy is so harmful for almost all users in the crypto field in particular. However, i want to point out that we still don't have a better alternative.
Personally, i don't like it and avoid it at all costs. Fortunetly, i don't have to use platforms enforcing KYC verification.
The reasons for KYC to be introduced in financial markets in general was to prevent/reduce cases of fraud, tax evasion and money laundering ..etc If someone willing to use a centralized exchange, i think it's better to choose a regulated one with KYC rather than using own money with unknown platforms.

So many thoughts were going through my mind, why will a buyer cancel a trade that he claimed that he sent me money?

• Could it be that the buyer never sent the money and wanted to play smart?
• Why would a verified person would want to scam?
• How many traders would have actually been of this kind trap if they sent the Busd without making confirmation.

- Yes it is also a possibility but i don't also see reasons why should someone enjoy playing smart in an online transaction.
- Either he is ready to give up his account, or he is not the real owner of the account.
- As much as newbies got trapped in P2P exchanges.

[jrrsparkles]

Did you reported that user? Even though KYC may not save you but it may save others because he can't create no more accounts in the same name once Binance terminated their account for violation. Actually no matter how good the reputation and trading volume they have, once we report the user with valid proof about the fraudulent activities from a trader their account will be put on hold as soon as possible and all their funds will be locked forever, but I am not sure this happens on Binance p2p while LBC did this.

[RapTarX]

The amount was too small. I can't imagine why someone would try to scam for such an amount; provided that they are KYCed and can be tracked. Only possible scam scenario here can be that you didn’t check your wallet but released the payment. In that case, I guess you had no other option. That's what was in his mind I guess but who knows.
I don’t want to comment on whether KYC is good/bad; it's a variable IMO. You can get a lot of advantages with it as well. Binance allow 100 BTC daily withdrawal limit for KYCed users. You can't get this limit anywhere without KYC I guess.

[nakamura12]

KYC is either bad or good. It could be good to help your account recovery sure as you can provide the detail of your account and prove ownership. KYC could also be bad since the site or platform you have an account will request KYC but your KYC information is being sold, fraudulent activities and many illegal activities.

[Smartvirus]

~snipe~

Staling a trade is one way through which, some of these scammers have been known to actually scam reputable users on a reputable exchange, using p2p system. KYC doesn't stop a fraudulent person from getting involved in scams and frauds and KYC in the wrong hands becomes damaging to you so, its best you be mindful of what details and to which platform your submitting it.
So, these guys exist on these exchanges and all they want to do is just to stale a trade. They keep you chatting away the time and hoping for a credit and should you not have alerted the exchange and the compliant wait time gets exhaust, the coins could be released and its a done deal.

Always ensure you report or at least, notify the exchange that there is an issue with the trade to avoid any hasty move from the exchange.

[Huppercase]

The amount was too small. I can't imagine why someone would try to scam for such an amount; provided that they are KYCed and can be tracked. Only possible scam scenario here can be that you didn’t check your wallet but released the payment. In that case, I guess you had no other option. That's what was in his mind I guess but who knows.
I don’t want to comment on whether KYC is good/bad; it's a variable IMO. You can get a lot of advantages with it as well. Binance allow 100 BTC daily withdrawal limit for KYCed users. You can't get this limit anywhere without KYC I guess.

KYC is mandatory in Binance now. To be eligible for withdrawal, one has to undergo a compulsory verification before you will be able to deposit and withdraw.

[cryptoaddictchie]

I had many thoughts on mind but one that actually answer the question is that, KYC is never enough and can't stop any fraudulent act if they want to play smart, scammers are out there and they are developing new ways to get Maga (the innocents) that comes their way.

Actually you have an option to identify them. Yes even KYC can not be enough. Users can used fake Ids just to do such malicious scamming. Can't blame Binance if some got scam and keep trusting some users without any credentials. Users must also be responsible on their fund and be cautious enough to deal on such situation especially when the money involved is your hard earned money.

[Taskford]

I had many thoughts on mind but one that actually answer the question is that, KYC is never enough and can't stop any fraudulent act if they want to play smart, scammers are out there and they are developing new ways to get Maga (the innocents) that comes their way.

Actually you have an option to identify them. Yes even KYC can not be enough. Users can used fake Ids just to do such malicious scamming. Can't blame Binance if some got scam and keep trusting some users without any credentials.

That's why other platform ask  a back to back ID submission plus selfie with ID to verify the real owner of the account maybe others should follow this to identify those Identity theft. Mostly Binance do this and I never have any problem with this since they are a good platform. Although for sure many will dislike this option but for sure one day they will understand that this is important since it will make our account safe from other who fake our identity and claim our own assets.

[dbc23]

Kyc verification isn't still a guarantee for a safe trade on centralized exchange. Despite how Satoshi tried hard to solve this issue of trust exchanges still feel the level of trust provided on the Blockchain network isn't secure enough and still go about KYC which most scammers have taken advantage of even providing fake identity just to scam people of their investment. One just has to be extremely careful

[UserU]

Actually you have an option to identify them. Yes even KYC can not be enough. Users can used fake Ids just to do such malicious scamming. Can't blame Binance if some got scam and keep trusting some users without any credentials. Users must also be responsible on their fund and be cautious enough to deal on such situation especially when the money involved is your hard earned money.

If it involves those live video sessions, I would say the chances of faking it are pretty low.

[20kevin20]

Kyc verification isn't still a guarantee for a safe trade on centralized exchange. Despite how Satoshi tried hard to solve this issue of trust exchanges still feel the level of trust provided on the Blockchain network isn't secure enough and still go about KYC which most scammers have taken advantage of even providing fake identity just to scam people of their investment. One just has to be extremely careful

I think there needs to be a limit between what Satoshi wanted to do and what exchanges do. Satoshi wanted to remove the need of third parties; exchanges use KYC either to sell your data, to protect you supposedly or both. Either way, Satoshi probably never even thought KYC would ever be a thing with crypto. Remember there are so many ways to exchange without using centralized parties or KYC - I've personally used them so often and never got scammed. When there is no trust, you have to trust yourself.

[TheMimic1]

Honestly I've been using binance P2P for months now and no issue so far, the fact is I only do business with sellers and buyers that have over 90% good feedback, sometimes there will be delay in receiving alerts it happened to me twice but they other guys are always calm, if I don't see alert I'm not releasing the coin that's my rule no matter what