Forget selfies and passports – crypto should be private

[BlackHatCoiner]

I'm a Compliance Officer at a regulated crypto exchange. My job is collecting your data.

4.2 million passports this year. Selfies. Utility bills. Proof of address. Proof of income. Proof you exist.

Last Tuesday we froze a user's account.

$48,000.

He tried to withdraw to self-custody.

The system flagged it.

"Suspicious activity."

Suspicious means we don't know why you want your money.

So you can't have it. Until you explain. To us. In email.

He explained. We reviewed it. Took six weeks. Missed his rent.

That's called "compliance".

Our Head of Security went on a podcast last month. Said user data is "safe".

Safe means stored on AWS servers in three jurisdictions with two-factor encryption.

Sounds safe. Ledger had encryption too. Celsius had encryption too. Equifax had encryption too. 147 million records leaked.

Our encryption is better. We think. We hope. We don't actually know. But we said "safe". That's what matters.

We reported 340,000 users to tax authorities this year. Automatically. They didn't know. That's not a bug. That's a feature.

A user in Turkey asked why he needs to upload a selfie to swap $50 of Bitcoin. I said "regulatory requirements".

Requirements means a bureaucrat in Brussels decided your $50 swap is a national security matter.

I can't change it. I don't believe in it. But I enforce it.

That's compliance. Believing is optional. Enforcing is not.

Last year we got hacked. Not publicly. Internally. Hacker got access to 12,000 KYC records.

Names. Faces. Addresses. We handled it "internally".

Internally means we didn't tell you. But we told legal. Legal said don't tell anyone.

So we didn't.

Your passport is probably fine.

Probably.

The board asked me last quarter if no-KYC exchanges are a threat. I said "they serve a niche market".

Niche means millions of users in Turkey, Argentina and Nigeria who stopped uploading selfies and just started swapping.

In 90 seconds. No account. No passport.

A platform like b1exch does in seconds what we do in weeks.

No account. No database to breach. No contractor accessing your face at 2 AM while you take a dump.

They don't collect data.

We collect everything.

They don't report you.

We report everyone.

The regulators say no-KYC is dangerous.

Dangerous means they can't control it.

I still work here.

But last Thursday I swapped on b1exch.

Took 90 seconds.

You think the people who build the cage sleep inside it?

[Mia Chloe]

We can go on and on about this for as long as the financial system exists but the truth remains you cni stop KYC and centralization as long as the government exists so will it plus these days people don't even care no more they just opt in for these out of the blue.

Outside this forum where decentralization is recognised and practiced you will barely find a handful of people that value decentralization they all buy the concept of it being sugar-coated as security not control over you and your assets.

[HyperCodexV]

We can go on and on about this for as long as the financial system exists but the truth remains you cni stop KYC and centralization as long as the government exists so will it plus these days people don't even care no more they just opt in for these out of the blue.

Outside this forum where decentralization is recognised and practiced you will barely find a handful of people that value decentralization they all buy the concept of it being sugar-coated as security not control over you and your assets.

Personally I don’t fully agree that people don’t care at all. I think people actually care about privacy, they just don’t have many real options or they don’t fully understand what they are giving up for that swift illusion of simplicity and convenience that all this platforms package for users.

The honest truth is that most people just want something that works fast and easy, so they follow whatever platform is popular without thinking deeper about control or data. It's not always that they don’t care, sometimes its just convenience over awareness. But slowly and surly, as more people experience issues like frozen funds or data leaks, I think more users will start paying attention and looking for better alternatives.

[Mia Chloe]

~snip

What you are saying has no statistical backing. People blindly love centralization because of illiteracy, laziness or fear. There are countless people that won't hesitate to do KYC on a centralized platform just because of $5 bucks worth of bonus and you say what again? People just assume once legal stuff is involved their interest is safe.

Let's not get started about the argument on speed DEX are crazy fast and support your interest way more. The average Joe thinks he's safe because he's working with an average of 200 bucks a month... Wait till it's 5 or 6 figures then you'll picture what a trap really means.

[PrivacyG]

We can go on and on about this for as long as the financial system exists but the truth remains you cni stop KYC and centralization as long as the government exists so will it plus these days people don't even care no more they just opt in for these out of the blue.

Outside this forum where decentralization is recognised and practiced you will barely find a handful of people that value decentralization they all buy the concept of it being sugar-coated as security not control over you and your assets.

People are being extremely dumbed down as we speak but there either has to be a fight for our own rights to Freedom and Privacy or this illusion of Security which is in fact complete control will take them down together with us.  It already affects all of us.  And we 'can not stop' Know Your Customer and Centralization particularly because most of us think this way and continue to support them.

What would Binance be if at least half of its users turned their back to their Exchange as soon as they realized it was all Centralized and against the purpose Bitcoin exists?  Or.  What would Supermarkets do if every time one of them switched from physical, existing cashiers to automated checkouts there was a load of people every single day complaining about it, asking whether they could interact with a human and leave if they are answered negative.

It is more convenient to be anti social and do the work the Supermarket had to pay a cashier for with zero extra benefits for you.  You are being turned in to a wild human who hates REAL social life and drops on your knees every time you feel a little bit of 'convenience'.  No one fights back so this obviously is only going to progress to a stricter, scarier, loner future where convenience is actually having no control over your own actions or emotions.

[sheenshane]

That's the problem when we use a centralized exchange.
If there's a security breach and data leak, user credentials can be stolen.  That's why big exchanges use the word "SAFU" to gain users' trust and make them feel comfortable, but the reality is that credentials might still be compromised someday.  But that's not enough, how do we know if they are really safe? The main advantages of CEXs are best execution, deep liquidity, and simpler trading, but they can't guarantee your privacy.

You're right, OP.
Platforms like b1exch and sageswap are better if you care about privacy, offering reasonable fees and a convenient way to swap crypto without leaving dangerous credentials that could lead to future hacks.

[JoyMarsha]

We live in a world where the government and private agencies have made it that your identity is much safer with them, no need to panic.

Asking questions and not doing as asked to, to provide details about yourself now feels like a must thing to do. And if you feel it is not, you won't be allowed to get the services others are receiving.

You see, the systems in place are there to make everyone succumb by revealing their personal details without hesitation or questioning of what happens furthermore

[yhiaali3]

Your long post reminded us of a funny, stupid, annoying, but simultaneously amusing incident.
I transferred $30 worth of Bitcoin from a mixer to Binance, and although I met all of KYC's requirements, Binance sent me a message immediately after the deposit stating that there was a suspicious deposit in my account and that I needed to provide additional evidence about this deposit.

I laughed and wondered if a small deposit of $30 in Bitcoin was worth all this trouble from Binance? Did this $30 pose a security threat to the US government and the governments of the world?

[CryptoYar]

[...]

Hahaha. Just like you I also experienced this. I am from Pakistan and I was surprised when I got this message from Binance. I just transferred $100 and they just asked me for payment proof.

And ask for a little quiz and also asked that from where you get this payment. That was little annoying for me. And was funny your amount was just $30. And my was $100 and when I got that message and smiled little and just thought like you.

[Fivestar4everMVP]

An amazing and unique way to market B1exch and I completely love it, absolutely gorgeous, sexy and super intelligent if your write up was to be classified as human and a lady to be precise.. 😁

Truth being that many of us absolutely under-estimate the power of our personal data which we freely and willingly give up to this centralize services very easily just to allow us a space on the exchage to trade and we still pay them fees, we trust this type of exchanges much more than we trust our personal data..
And we also at the same time disregard the actual exchanges we should really be trusting while trusting the wrong ones..
I hope a time comes when we realize the mistakes we are making and make a u-turn and return back to the core essence of bitcoin which is our finance being free from third party controls and also privacy/decentralization.

[SeriouslyGiveaway]

I'm a Compliance Officer at a regulated crypto exchange. My job is collecting your data.

4.2 million passports this year. Selfies. Utility bills. Proof of address. Proof of income. Proof you exist.

Last Tuesday we froze a user's account.

$48,000.

He tried to withdraw to self-custody.

The system flagged it.

"Suspicious activity."

Suspicious means we don't know why you want your money.

So you can't have it. Until you explain. To us. In email.

He explained. We reviewed it. Took six weeks. Missed his rent.

That's called "compliance".

Why KYC is extremely dangerous – and useless.
It's about KYC, and there are other warnings about centralized exchanges, online platforms too.
Reminder: do not keep your money in online accounts.

Many accidents and warnings.
Court freezes N548.6 Million belonging to ‘ByBit, KuCoin’ Nigerian crypto users
Be careful using Binance & Centralized Exchange
Sanctioned Services and the service traceability to this forum, Any danger?
OKX frozen my account and required me to KYC with a less than $1,000 deposit.
Recent events should make everyone withdraw all their coins to their own wallets: Part 1
Recent events should make you withdraw all your coins to your own wallet: Part 2
Recent events should make you withdraw all your coins to your own wallet: Part 3
Get your coins out of custodial wallets now: Part 4

[X-ray]

That should be the ideal world but the truth is the government want control and the only way to realistically control anything crypto related is through KYC in exchanges and many more.

It is what it is, the government want crypto to be traceable.

[legiteum]

One major problem with financial security regulations is that relatively small amounts of money are treated the same as very large amounts of money.

With big money, there are big risks. If you are dealing with 10s of thousands of dollars or more, it's the kind of money people kill for, or can be used to commit crimes, or launder money from crimes, or evade large amounts of taxes, etc. etc. Scrutiny at this level is unfortunate, but sadly we live in a dangerous world.

But if you are dealing with "small" money--say under $1,000 US, then... who cares? Serious criminals, money launderers, and so on aren't going to deal with amounts this small.

The US passed a law in the 1970s that created a $10,000 cash limit for banks, wherein over that amount the transaction was flagged and reported. But you can bring $9,000 in cash to a US bank and deposit it, and there will be no scrutiny. This rule works very well because most people don't need such huge amounts of cash unless they have very special needs, or they are doing something fishy.

I think they need to pass a similar law for crypto: anything under $10k and no KYC is required. Obviously the law would need to be more complicated to make sure a single entity stays under $10k, but there is technology that can figure this out.

Another important thing that regulations need to take into account is chain analysis. When the ledger is available to law enforcement (either publicly like it is for Bitcoin or through legal inquiries like it would be for private systems), then law enforcement can trace where the money started and where it ended up, thereby identifying the entity making the transactions. Chain analysis can give valid inquiries by authorities a lot of information if they have a valid, targeted inquiry.

There's another important trait of "big" money, too, which is very different than small money: most people want their life savings etc. held under their name so it can't be stolen or lost. Yes, the OP is correct that there are lots of risks out there in doing that too, but the idea of physically guarding one's own retirement savings it simply too scary for most people. That's why 99% of people use a bank.

Hence we need one approach for "small" money that you don't mind risking and want to use anonymously, and another approach for "big" money that is life-changing for most people.

[lovesmayfamilis]

Your long post reminded us of a funny, stupid, annoying, but simultaneously amusing incident.
I transferred $30 worth of Bitcoin from a mixer to Binance, and although I met all of KYC's requirements, Binance sent me a message immediately after the deposit stating that there was a suspicious deposit in my account and that I needed to provide additional evidence about this deposit.

I laughed and wondered if a small deposit of $30 in Bitcoin was worth all this trouble from Binance? Did this $30 pose a security threat to the US government and the governments of the world?

It seems that they are just pointing a "finger in the sky," and the amount itself is not important at all. I also came across something similar and stopped interacting after such methods of "respecting the client."

Our encryption is better. We think. We hope. We don't actually know. But we said "safe". That's what matters.

I liked. The main thing is to say something, and people today believe, as with everything that AI writes, and will do everything they are told about “safety.” Many people still prove to me that: "it's because it's written on the Internet" as a result of the fact that it's worth believing. I remember the time when someone said that everything that is shown on TV is true.

I also liked the OP's post and advertisement, but I'm worried that everything good will end very soon. And the more people know about this "convenient place," the sooner it will cease to be so cozy.

[Die_empty]

We live in a world where the government and private agencies have made it that your identity is much safer with them, no need to panic.

Asking questions and not doing as asked to, to provide details about yourself now feels like a must thing to do. And if you feel it is not, you won't be allowed to get the services others are receiving.

You see, the systems in place are there to make everyone succumb by revealing their personal details without hesitation or questioning of what happens furthermore

If you don't provide them with everything they need, these authorities will frustrate you and even treat you like a criminal. Someone could be charged for fraud or tax invasion if they decide to use decentralized platforms for business transactions.  

Some transactions from mixers and other privacy tools are flagged in exchanges and you would be required to go through some rigorous KYC process to prove that the funds were not proceeds from criminal activities.

The solution lies in the Bitcoin community building workable systems that offer the services of some of these centralized platforms.  These communities should be able to offer alternatives to exchanges and other financial services that require KYCs.

[davis196]

We reported 340,000 users to tax authorities this year. Automatically. They didn't know. That's not a bug. That's a feature.

I kinda have doubts about crypto exchange users not knowing that their data can be sent to the tax authorities. This should be mentioned on every crypto exchange platform's Terms of Service. KYC trading platforms(both crypto and fiat) are required by the law to send financial information of their users to the tax authorities. Only a complete retard would be unaware of this.

A user in Turkey asked why he needs to upload a selfie to swap $50 of Bitcoin. I said "regulatory requirements".

Requirements means a bureaucrat in Brussels decided your $50 swap is a national security matter.

What "user in Turkey" and what "bureaucrat in Brussels"? Turkey is not a member of the European Union. I'm sure that Turkey doesn't have to comply to EU financial regulations. OP, your posts are entertaining but sometimes you are making statements that are far from the truth.
I know that KYC platforms suck, but non-KYC are still far from perfect. My fears of getting scammed on a non-KYC platform are basically equal to the fear of getting my personal information leaked and getting sold on the darkweb.

[Somegory]

Everywhere I look in crypto space today, everything screams the easy way out.

Centralised exchanges makes things easier for people and that's why million investors will still always prefer Centralised exchanges over other ways.

Many even know the right thing to do but they don't see why they should, because for what reasons? It's not everyone that cares about privacy, normally bitcoin shouldn't be purchased through a platform that asks for ID and address information.

It's a matter of what we all want, I am not going to confuse anyone why they should avoid exchanges that ask for KYC before you can trade or buy Bitcoin, they will learn themselves.

[john_egbert]

Everywhere I look in crypto space today, everything screams the easy way out.

Centralised exchanges makes things easier for people and that's why million investors will still always prefer Centralised exchanges over other ways.

Many even know the right thing to do but they don't see why they should, because for what reasons? It's not everyone that cares about privacy, normally bitcoin shouldn't be purchased through a platform that asks for ID and address information.

It's a matter of what we all want, I am not going to confuse anyone why they should avoid exchanges that ask for KYC before you can trade or buy Bitcoin, they will learn themselves.

They will get why they shouldn't do it eventually.

Nothing remains without consequences 

[Free Market Capitalist]

I love this series of threads. Not just because of the topic, but because of how he presents it.

The problem, in the case of this specific issue for example, is that the general public has started using CEX and similar platforms without anyone holding a gun to their heads, and most of them either won’t read the post or won’t be convinced by it. The people who are most convinced are those of us who already thought exactly the same about giving your personal data to centralized entities, even if we hadn’t thought to put it that way.

[7juju]

What you are saying has no statistical backing. People blindly love centralization because of illiteracy, laziness or fear. There are countless people that won't hesitate to do KYC on a centralized platform just because of $5 bucks worth of bonus and you say what again? People just assume once legal stuff is involved their interest is safe.

Most people choose centralised exchange because that's what they know, that's what comes to their mind anytime they have need for exchange, because the centralised exchanges have been more marketed and publicised than the Dex. Most people on the street outside this forum don't even know if there's anything like Dex. I believe the level of advertising that the centralised exchanges have made and are still doing, the Dex are yet to get to that level. When you meet random people on the street, ask them to mention any exchanges they know, you will likely hear Binance, Coinbase, and few other popular cex, hardly will you hear them mention any Dex.

That's to show that most people don't know that Dex that much. And you know people will always turn to what they know. Sometimes I don't usually blame people who turn to cex, because that's what they have at their disposal. Till people know Dex as they know some of the major cex, most people will always keep turning to cex. Not because they don't care about their privacy, but they are not aware that there's another alternative.