KYC as a big loophole. Abuse and how to fight against it?

[luckyledger]

Maybe you should try another service? changenow is not the one

And what about the user who lost his funds? His funds were taken hostage until he finishes endless kyc...

Certainly everyone should use other service and change now should be blacklisted, but there should be some way to those bad services. This is what this topic is about.

As it was said there, there is not much that can be done, after all, the best course of action is not to get into peculiar situations like that - even though it was said "if there are other ways other than what was described?", most of us said the same thing. It's not bad, it's just the way there is currently.
You wouldn't be able to sue the gov for that.

[bitcoin-shark]

In my opinion all KYC requests are a complete and proper abuse, the prevention of money laundering is just an excuse to be able to register us, control everyone, even the airdrops are now asking for sensitive data, how can we stem and counteract this phenomenon? only do airdrops that ask for generic data and use dex and p2p exchange

[pieppiep]

In my opinion all KYC requests are a complete and proper abuse, the prevention of money laundering is just an excuse to be able to register us, control everyone, even the airdrops are now asking for sensitive data, how can we stem and counteract this phenomenon? only do airdrops that ask for generic data and use dex and p2p exchange

Well, As of now, the issue of KYC has been a problem that many users of cryptocurrencies have to deal with, and mostly in relation to privacy and owning data. KYC is traditionally viewed as one type of excessive control, typical uses for which are such things as fighting money laundering. However, as regards this phenomenon, several measures can be put in place in advance. First, using the decentralized DEX platforms and P2P exchanges that don’t tightly verify identities allows to remain anonymous.

Second, it is necessary to participate in airdrops or projects which require only general or pseudonymized data and do not request personal data. Another way of rallying people support towards the projects that keep user privacy bare is through establishing more awareness of the available projects that uphold the standards of freedom of individuals. Therefore, the power struggle between the necessity to protect the client’s privacy and the requirements of the law remains a problem that the industry has to solve.

[bitterguy28]

In my opinion all KYC requests are a complete and proper abuse, the prevention of money laundering is just an excuse to be able to register us, control everyone,

the government likes to say that kyc keeps us safe but it is not always the case as mentioned they say that non kyc makes way for illegal activities but again not always the case and it does not even happen most of the time if kyc is able to save someone from an illegal activity then congratulations but that is not enough still to convince me that non kyc will destroy the system and put us all in danger

even the airdrops are now asking for sensitive data

it is really scary we need to be more careful with our data and prioritize privacy at all times that is what will keep us safe

[Stompix]

How can we even fight against this practice, aside from avoiding such services, what if it happens, like in the case mentioned above? Is it realistic to form some kind of association that would protect crypto users, perhaps even have legal representatives in the most common countries?

It will be a legal nightmare!
First, the cost will be huge, and the financial burden will be more for cases outside US and EU jurisdiction as here we have the advantage of being able to bring to court any company that operates in the EU space, a thing that is not possible for people residing in India for example, then the nightmare of actually filing a case is a foreign court for a foreign person!

Then the reluctance of many to actually fill a case, the sums involved and so on and on and ...
Yeah, nice in theory and morally the normal way of acting against those abuses that are just selective scamming but really hard to do it!

[royalRitta]

In my opinion all KYC requests are a complete and proper abuse, the prevention of money laundering is just an excuse to be able to register us, control everyone, even the airdrops are now asking for sensitive data, how can we stem and counteract this phenomenon? only do airdrops that ask for generic data and use dex and p2p exchange

Yeah, not much can be done about it, only using something without that much data needed, and as it was said, in some drops, more data is needed than just to get your drop and leave it all with the profit in your hands.
The last thing that I saw in that way is Blum posting about the potential eligibility for the drop on X: there was a face-check in the list, I think that's for multi accounts users to be rekt

[enoch_from_off]

How can we even fight against this practice, aside from avoiding such services, what if it happens, like in the case mentioned above? Is it realistic to form some kind of association that would protect crypto users, perhaps even have legal representatives in the most common countries?

It will be a legal nightmare!
First, the cost will be huge, and the financial burden will be more for cases outside US and EU jurisdiction as here we have the advantage of being able to bring to court any company that operates in the EU space, a thing that is not possible for people residing in India for example, then the nightmare of actually filing a case is a foreign court for a foreign person!

Then the reluctance of many to actually fill a case, the sums involved and so on and on and ...
Yeah, nice in theory and morally the normal way of acting against those abuses that are just selective scamming but really hard to do it!

Like most things out there with good ideals but bad practise in reality.
And I do think that the govs would just overwhelm the person in question no matter what.

[NotATether]

The biggest obstacle, generally, is that the 'victim' is usually not from the same country as the exchanger, everything happens online, and it’s very hard to legally recover the funds. Especially when it involves 'smaller' amounts, although I wouldn’t say that $2,500 is a small amount for everyone. Mandatory KYC has been imposed as a regulation, but it seems like it's an open loophole for abuse and 'legalized' taking of funds.

Generally, exchangers and other services will try to be compliant with the law of their country's jurisdiction only, and they just won't do anything about user disputes that are not high-profile enough to destroy their reputation. They think it is a waste of their time trying to explain their criteria in detail a well. Meanwhile the user is left out of pocket and have little to no recourse in resolution.

How can we even fight against this practice, aside from avoiding such services, what if it happens, like in the case mentioned above? Is it realistic to form some kind of association that would protect crypto users, perhaps even have legal representatives in the most common countries?

By using only the platforms which do not enforce any sort of KYC.

[luckyledger]

The biggest obstacle, generally, is that the 'victim' is usually not from the same country as the exchanger, everything happens online, and it’s very hard to legally recover the funds. Especially when it involves 'smaller' amounts, although I wouldn’t say that $2,500 is a small amount for everyone. Mandatory KYC has been imposed as a regulation, but it seems like it's an open loophole for abuse and 'legalized' taking of funds.

Generally, exchangers and other services will try to be compliant with the law of their country's jurisdiction only, and they just won't do anything about user disputes that are not high-profile enough to destroy their reputation. They think it is a waste of their time trying to explain their criteria in detail a well. Meanwhile the user is left out of pocket and have little to no recourse in resolution.

How can we even fight against this practice, aside from avoiding such services, what if it happens, like in the case mentioned above? Is it realistic to form some kind of association that would protect crypto users, perhaps even have legal representatives in the most common countries?

By using only the platforms which do not enforce any sort of KYC.

Unfortunately, that's true. I've read lots of cases that you described on BitcoinTalk and overall usually, the results lead nowhere in terms of resolving a dispute due to what you described.
The main thing would be to really think twice while using something with KYC.

[NotATether]

Unfortunately, that's true. I've read lots of cases that you described on BitcoinTalk and overall usually, the results lead nowhere in terms of resolving a dispute due to what you described.
The main thing would be to really think twice while using something with KYC.

Not only that, but to make matters even worse, you have no idea when said KYC is going to be triggered, or if it will happen in your exchange.

Even if you use "clean coins" you might unknowingly trip over a threshold and the exchange could haggle you for documents for months.

Most instant exchangers have a disclaimer saying "we reserve the right to carry out AML checks and ask for additional documents at our discretion", which in many cases is just to cover their skin so that they can do questionable business activities with 3rd parties.

[0t3p0t]

The only problem with too much KYC is that if that exchange is compromised then it mean our privacy is compromised as well and there are times they are doing dirty tricks from our funds like freezing it for suspicious activities maybe they don't understand how crypto works.

[royalRitta]

The only problem with too much KYC is that if that exchange is compromised then it mean our privacy is compromised as well and there are times they are doing dirty tricks from our funds like freezing it for suspicious activities maybe they don't understand how crypto works.

Also, it can be used to push some transactions down, because of the money being acquired or used as "dirty" And you will be in a loophole to verify your identity to get your funds back.

[examplens]

Most instant exchangers have a disclaimer saying "we reserve the right to carry out AML checks and ask for additional documents at our discretion", which in many cases is just to cover their skin so that they can do questionable business activities with 3rd parties.

Ok, but what after that?
Not many exchanges have a clear rule on what to do with funds after the user passes KYC. However, I got the impression that they are trying to delay or make passing KYC impossible in order not to get into that complicated part of what happens after that.

Imagine that the notary took away your car during the mediation of the sale because it seemed suspicious to him. At the same time, you have no one to blame for this decision

[Findingnemo]

Most instant exchangers have a disclaimer saying "we reserve the right to carry out AML checks and ask for additional documents at our discretion", which in many cases is just to cover their skin so that they can do questionable business activities with 3rd parties.

Ok, but what after that?
Not many exchanges have a clear rule on what to do with funds after the user passes KYC. However, I got the impression that they are trying to delay or make passing KYC impossible in order not to get into that complicated part of what happens after that.

We can't do much to be honest unless ready for the legal fight against a corporate over nothing.

So my bet will be ruining their reputation which is possible if the user has convincing evidence that he did all he was supposed to do but still his funds are frozen indefinitely and if this starts to affect the exchange's business then they will surely look into it and if there's no fault on the user end they will probably resolve it ASAP.

[enoch_from_off]

Most instant exchangers have a disclaimer saying "we reserve the right to carry out AML checks and ask for additional documents at our discretion", which in many cases is just to cover their skin so that they can do questionable business activities with 3rd parties.

Ok, but what after that?
Not many exchanges have a clear rule on what to do with funds after the user passes KYC. However, I got the impression that they are trying to delay or make passing KYC impossible in order not to get into that complicated part of what happens after that.

We can't do much to be honest unless ready for the legal fight against a corporate over nothing.

So my bet will be ruining their reputation which is possible if the user has convincing evidence that he did all he was supposed to do but still his funds are frozen indefinitely and if this starts to affect the exchange's business then they will surely look into it and if there's no fault on the user end they will probably resolve it ASAP.

You would probably be able to do so only if you are an influencer of sorts on YouTube, otherwise, there wouldn't be any hit for them to take, unfortunately.
And even then, the prices for it would be huge. Too huge.