WHY YOU SHOULD AVOID KYC.
- KYC UNDERMINES YOUR PRIVACY
KYC (Know Your Customer) procedures will ask very personal information, such as your name, telephone number, email address, home address, profession, copy of ID, copy of utility bills, video of you holding your ID, bank account, Source of Funds questions, Source of Wealth questions and overview of all your (bitcoin) transactions.
This information will be linked to your IP address, your financial transactions at the KYCed platform and your related future transactions on the public bitcoin blockchain.
Your personal information risks to be leaked to
- partners of the KYCed platform. KYC processing is often outsourced. KYC information is often sold.
- governments, e.g. by EU DAC8, Directive on Administrative Cooperation.
- criminals
- everyone. Bankruptcy trustee can publish the list of KYCed customers together with a summary of their transactions. This happened e.g. with 600k+ Celsius users.
Privacy is easily lost. But very hard or impossible to restore.
- KYC UNDERMINES YOUR SAFETY.
Privacy is important to protect you against the wrongdoings of others.
Your KYC data is very useful for identity theft and abuse by criminals. This means KYCed platforms are very much targeted, not only because of their financial assets, but also because of their customers data.
When criminals set up fake accounts and do transactions in your name, this can not only cost you, it can also put you on blacklists of financial institutions. Many victims had their bank accounts frozen or closed.
Your leaked contact info can become a target for phishing.
Your leaked home address and IP address can attract thieves.
- KYC UNDERMINES YOUR FREEDOM.
Every element of your personal information, especially Source of Funds, Source of Wealth, and your transactions, can be a reason to freeze your funds at the KYCed platform, or to put you on a blacklist. False positives are possible, meaning you didn’t do anything wrong, but the platform thinks you did.
Banks are also KYC institutions. They might block you if they don’t like your transactions with exchanges.
You can have a friendly government now, but you can’t be sure about the future. There have e.g. been times and places where all (known) gold was confiscated.
- KYC IS EXPENSIVE.
Since processing and verifying KYC info is expensive, these costs are increasing the fees of the KYCed services. Or sometimes the KYC info is sold in order to recover these costs.
KYC-free services or peer-to-peer trades don’t have these costs and can therefore be cheaper.
- KYC IS CUMBERSOME.
Sometimes KYC verification takes weeks. Especially in a bull phase when many new customers want to onboard.
Sometimes your documents are not accepted and you have to retry.
Sometimes you are simply refused. They have your data, but you have nothing.
Often, KYC services will ask KYC updates. Especially when you just transferred assets to a service, they might freeze your assets until you answer additional KYC questions, such as Source of (these) Funds. This is called “shotgun KYC”.
- KYC IS FOREVER.
Some methods like mixing can give you forward privacy and cut the links between your KYCed transactions and your post-mix transactions.
But this doesn’t undo your KYC. Your KYC information can still be leaked. You can still get the question what you did with your KYCed assets.
- NOT EVERYONE CAN DO THE KYC PROCEDURE.
Not everyone has utility bills on their name. Some people live in a dictatorship, or need to avoid prosecution or stalkers.
As such, supporting KYC-free services is not only important for yourself, but also for helping others.
Consider buying/selling bitcoin peer-to-peer for cash. Or use KYC-free services such as those listed at https://kycnot.me.
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Eén reactie
Hey interesting article! I was wondering what I might do to counter KYC criminality when you have already shared your information with countless websites? Should I change phone number, e-mailadress, adress for a clean start?
Thanks in advance, keep up the good work!
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