[Reflection] REMEMBER: KYC gets people kidnapped!

[Free Market Capitalist]

The problem is that there are more and more KYC requirements due to regulatory obligations. We can get around them, and even though they aren't on this forum, there's another small percentage of users who can too.

But accumulating a large amount of Bitcoin without KYC could be a problem when it comes time to justify it to the authorities down the road.

As for kidnappings and other types of attacks, it's not so much about KYC as it is about the nature of the asset in question. For some criminals, these assets can be much more tempting because they can be stolen in an instant.

To them, $100K in Bitcoin—which they can steal in less than an hour with a $5 wrench attack—is more tempting than $1M you have in investment funds at the bank.

[KiaKia]

That part that says how KYC harm's startups is what I will never buy, I am also a big investors in Startups and I have seen alot trust me, if there will be no KYC for customers there should be some form of KYC for the teams themselves.

They are atleast not Bitcoin where decentralisation is must and it neutralise identification, but alternative coins? Hell no, these people put the necessity on customers and not themselves, they ask you to pass KYC verification but once they make money they run.

KYC is bad, I believe this to be true, but someone has to hold these criminal Devs responsible, they rob people off their Identity via KYC verification and they still get away with people's funds too, zero consequences.

[Dr.Bitcoin_Strange]

That's the reason why I don't use the two centralized exchange which I have done KYC on for purchasing my Bitcoin or any coins I want to hold, instead what I do is just buy USDT from the KYCed exchange withdraw it to a noncustodial wallet and from there to an exchange where I'm not forced to do KYC, that's where I buy my Bitcoin before withdrawing to my cold wallet address. In my opinion, those centralized platforms are not supposed to force users to do KYC if they don't suspect that a user has violated their policy or used unclean money to buy coins from their platform but some exchange or platforms makes it extremely compulsory before you can carry out a single transaction. The effect of KYC all those victims that has been attacked is what I'm learning from, to be very careful and avoid those KYC platforms.

[Charcol]

I'd like to share two reflective articles/posts on the risks and obstacles associated with mandatory KYC.. Here's the text from Unstoppable Wallet on the subject below:

Is there any way to solve the problem of mandatory KYC without exposing users' data to risks?

It is probably not possible to completely eliminate the risk. But maybe this can be solved to some extent if they take the minimum amount of information. And if they delete the information when the legal need for it ends. Then maybe it is possible to eliminate some of the risk. Especially if the institution that reserves all the KYC information can prevent our information from being stolen or provide maximum security, then it will not be that much of a problem for us.

[Die_empty]

In my opinion, those centralized platforms are not supposed to force users to do KYC if they don't suspect that a user has violated their policy or used unclean money to buy coins from their platform but some exchange or platforms makes it extremely compulsory before you can carry out a single transaction. The effect of KYC all those victims that has been attacked is what I'm learning from, to be very careful and avoid those KYC platforms.

Many centralised platforms would be pleased to offer non-KYC services because it could increase their customer base. But many of them are under an obligation by their licence agreement to keep users' information. There are examples of governments sanctioning these platforms because they fail to collect KYC information.

From records, a high number of kidnapping cases involving crypto users are caused by ignorance and foolishness. When crypto users flaunt their wallet balance on social media, they become cheap prey to criminals.

[goldkingcoiner]

Getting potentially kidnapped or having their personal government-issued documents used to take out loans in your name or some other horrible shit is just another reason why I am so very against KYC.

All it takes is one leak.... And that risk increases every time you do KYC on a different website.

Bitcoin does not require KYC. That's why I like it so much.  

[Doan9269]

One of the things I have observed over time about crypto kidnapping cases is that the attackers don't only pick up random people; they may concentrate more on those they know are into cryptocurrency and have an idea of their worth, then they arrange how they will kidnap them and demand ransom.

Not every platform will make use of and give our kyc information could definitely seek cure them without releasing to any third party upon request, I now hear that some are even Biden to buy for users kyc information from exchange or other random platforms online, this is why we cannot trust the entire process because it is either we maintain having our personal information with us or risk the chance of giving it to any platform. They may decide to use it against us.

[Muba20]

During the KYC process, a customer has to provide all his personal information. There, the national identity card and even the phone number have to be added and the information has to be sent. As a result, if for some reason the information is leaked from the KYC database, then it will definitely compromise personal security. If all the information sent there goes under the control of a kidnapper, then it is very natural for unpleasant incidents to happen to that customer.

Though we will not find any hard evidence where customers have faced losses in various ways due to the KYC database leak, it will not be difficult to understand some incidents that prove its truth.

We heard early last year that big crypto investors in France were attacked. And the KYC data leak was blamed for that attack. Although no information was found on that matter but most analysts assume that would be the cause of KYC data leak. In 2020, when the information of about 2.7 million customers was leaked from Ledger's e-commerce database, many of the customers faced a wrench attack. While it cannot be said for sure that all attacks were caused by KYC database hacks, in most cases, there is a high probability that this is the case.

[TedMosby]

Genuinely asking, what's the best practice to avoid KYC in crypto when the majority of our daily transactions still rely on fiat currency? Don't tell me to leave fiat currency and go all in on crypto for daily use. I might be able to do that, but the counterparty can't accept it.

Compared to fiat, for people who keep their money in banks, what's the ratio of people being kidnapped because of leaked KYC data? I live in Indonesia, where service providers and government institutions that I gave my data to because it was mandatory have already been leaked on the internet. The majority of the data has already been sold on the black market. I assume my data is one of them. In this case, when you find out your data is being sold on the internet, does it make you more "easy" about KYC, or the opposite? Because your data is already out there.

I don't have the data, but I think apart from KYC, your behavior on the internet, especially on social media, matters the most. Posting about crypto, your balance, your PNL, and then following it with posts showing off your real life is the most dangerous thing because it can attract people to commit crimes. CMIIW.

[BlackBoss_]

Genuinely asking, what's the best practice to avoid KYC in crypto when the majority of our daily transactions still rely on fiat currency? Don't tell me to leave fiat currency and go all in on crypto for daily use. I might be able to do that, but the counterparty can't accept it.

It says about risk of using even decentralized exchanges, P2P trades while your privacy and security of your bank account as well as you financial status under government and central bank are all unsafe. Because if a trade is between bitcoin and fiat currency through bank transfers, it will be recorded in bank system and government have all necessary traces to tax you.

It's better if trades are done in cash but this method has risk as well as inconvenience like possible physical attacks, and need of moving to the trade locations.

It's still not possible to do everything through bitcoin and completely leave the bank system. Governments also will try to force citizens to declare about their bitcoins and cryptocurrencies, and it turns to be illegal if people don't make declaration on their assets. Hence, bitcoin use later will become illegal too, and there are signals from some countries that they are moving to this legal and regulatory direction.

[Nrcewker]

I also try to avoid using KYC exchanges whenever possible. That’s why an open source, offline wallet is the best option for holding your coins. Electrum is undoubtedly one of the best wallets for this purpose.

However, as we know, if you want to buy or sell crypto, you usually need to use an exchange, and most exchanges require mandatory KYC verification. As suggested in the OP, KYC can cause real harm.

To deal with this, I think P2P trading is the best alternative. You only have to share your bank account details to convert your crypto into cash, and that’s it. It may not be the perfect solution, but it’s the most practical one available. The KYC trap is a huge mess. Companies don’t care enough about your privacy, and hackers certainly don’t respect it either.

[OcTradism]

I also try to avoid using KYC exchanges whenever possible.

If you can use no KYC centralized exchanges, it should be your priority but remember to use with small fund and withdraw fund immediately after buying order is filled.

Because KYC or not, it's always very risky to store fund when you don't control private keys.

That’s why an open source, offline wallet is the best option for holding your coins. Electrum is undoubtedly one of the best wallets for this purpose.

There are close source and open source wallets, and let's prioritize open source wallets.
There are custodial and non custodial wallets, surely we must use non custodial wallets, so that we have wallet seed phrase and private keys.

You seemed to describe it not accurately or lack of details. Like you can use Electrum wallet (open source, non custodial) and keep it offline but if you do it not properly, you can change it to a hot wallet (no longer airgap).

To have an airgap wallet, that device must be removed all physical parts that can connect the device to Internet. If a wallet switches from online and offline mode, it's a hot wallet.

[Cookdata]

The government should realise  that the primary purpose for the introduction of KYC has back fired. KYC is a potential death sentence IMO. Hackers succeeds in hacking a company's data base and impersonate data and information with the primary aim of carrying out illicit activities with it. This results to many false positives when investigating such crime; the hacker gets away with the crime while the customer whose information was impersonated now face the penalty, so sad to see many innocent people face this kind of challenges all because the government wishes to monitor all our daily activities and transactions while claiming to combat financial crime. They should also understand that privacy is not all about having something to hide, rather it is mostly about reducing unnecessary risk associated with KYC compliance because the more companies are in possession of your sensitive data, the higher the chances of your identity being hacked and impersonated by hoodlums.

You think the government doesn't know about this earlier on? Before exchanges, crypto became the next big tech, people with massive wealth were been targeted through their info. How do you think robberies were done in the early 2000s? They get access to their victims information, that was when there was no internet everywhere but with little victim information, they study them for weeks and months until they finally carried out their planss.

Look back how banks were been robbed then, it's usually insider information, the government knows the risk involved in Kyc and you know what's bad with this centralized exchanges, they are the most poor companies with security. I don't think any of the crypto centralized exchanges will come publicly and say they have not use, sell or leak users info, that's a big lie. They all have done this before.

But then again, it is a painful realisation that going against these crazy government policies is really challenging. Though their are ways around it when it comes to Bitcoin but most companies and civil service job do not pay in Bitcoin, they pay with fiat, so how do we go about this?  Really challenging time for privacy lovers I must say.

You know what's so painful about cases that involved Bitcoin and security agency, there is no vote of confidence in any of them. You can be lucky to have a case in US if it involves huge amount of money like $100k and above, anything below they don't help victims when it involve Bitcoin case and I think more people will always be victims of this when there is involvement in data leak from an exchanges, the government and security exchanges need to audit them to know what's going behind door.

[SeriouslyGiveaway]

Look back how banks were been robbed then, it's usually insider information, the government knows the risk involved in Kyc and you know what's bad with this centralized exchanges, they are the most poor companies with security.

They are not actually all poor as they can be big or small exchanges. Big exchanges don't always have good security, and even they proclaim like "Your funds are SAFU", who knows what they actually do behind the scene?

Exchange accident like Mt. Gox, FTX exchanges or Terra only knew when it was abused or bad managed a long time till its collapse.
Historically, many exchanges were hacked and died.
Hacked exchanges since 2011.
Cryptocurrency exchange graveyards.

I don't think any of the crypto centralized exchanges will come publicly and say they have not use, sell or leak users info, that's a big lie.

They say or don't say it publicly, it is not important because when you sent your documents out for KYC, you lost it, and what the exchanges do after that is beyond your control. So let's prepare for the worst with your KYC and identity documents.

[salad daging]

What I noticed on this forum is that many people have gone for the KYC way which are the centralized exchanges, but which is very dangerous if the data get leaked to the bad hands. They use it for P2P.

There is no other way than to choose KYC on centralized exchanges, I believe most people have done it to conduct trading activities or withdraw money to fiat.
About the leaked data, the platform is responsible, we only surrender if we become victims.

Some people do not know that their decision to buy Ledger Nano directly from the company can lead to bad people knowing that they have bitcoin and they know their homes

Not only Nano Ledger, Trezor database was leaked, often my email received phishing messages in the name of Trezor.

KYC is extremely dangerous till today.

Yep, the regulations are getting tighter, we just have to comply.

[NotFuzzyWarm]

No, KYC does NOT get people kidnapped. The victims OPSEC does.
Making it publicly known that you have wealth be it crypto or fiat is what can endanger you.

That's not to say that financial company data breaches can't happen, just that they are very very rare because of the very good IT security that most banks and exchanges have. Considering banks and other financial institutions are very juicy targets the rarity of them getting hacked speaks volumes about what tight security can do.

[Forsyth Jones]

How are you prepared to combat KYCs? For example, in a totalitarian state, where KYCs are directly imposed through legislation.

There isn't, one person cannot do everything alone. It's a spiritual struggle, the state is the demon that imprisons humanity in eternal backwardness, the world lies in the power of evil, there is no other explanation.

The only thing that surpasses the state is technology, tools like transportation apps, Bitcoin, AI and etc can somewhat circumvent the state's voracity a bit, but only for who know how to use them and use them for good. And that's what individuals like us can do, both to increase our productivity and as an alternative to state services.

All we can do for now is continue using Bitcoin, use other privacy-based technologies, teach our children, the next generation pro-freedom values, the defense of private property and always use technology as a tool to increase productivity and use alternatives that don't directly involve bureaucrats' services, for instance, such as instant exchanges, and hope that the next generation is born with immunity to the ignorance of the current generation.

[HelliumZ]

I would not have understood the KYC issue at all if I had not come to the Bitcoin forum, especially when I did KYC with my personal documents on multiple gambling sites, I first understood how harmful KYC is for a user. How do I verify myself with my personal documents on all the sites that I never trust. While verifying myself, we leak our personal identity information and that is very harmful for us. If for some reason all these sites or central exchanges use our personal documents for some bad or anti-state purpose, what will happen to us? That is why I have always been against KYC. Why should I increase my danger by using personal documents for verification on any central exchange or gambling site?

[X-ray]

It is high time for the government to implement ZK-KYC and exchange or any centralized service which requires KYC can use the ZK proof.

If they are taxing us they can at least protect us from the wrench attack.

We don't need to do KYC over and over again across several centralized services just to prove our identity and increase the chance of KYC leak.

[montaga]

Before forwarding any sensitive data online you have to do a KYC (know your company), it is the law. Law always works two ways otherwise it is not a law.
You need to get the information for anyone who has access to your data once you satisfied with the people you are dealing with you my proceed and forward your data.