In networks, users repudiate the Coinbase measure. These users even suggest stopping using that exchange. Large amounts of bitcoin left Coinbase for other unknown wallets.
There is a wave of criticism from users who, when trying to operate with bitcoin on the centralized exchange Coinbase, find a series of requirements and requests that are more reminiscent of a bank than a cryptocurrency exchange.
Via Twitter, Mira Christanto, a researcher at the market analysis firm Messari, questioned that due to the update of Coinbase’s ‘know your customer (KYC) policies, account statements are now requested banking from at least three months ago.
It is also mandatory to explain when cryptocurrency trading began and how much profit has accrued thanks to those procedures.
The researcher also shared an image of several of the requirements demanded by Coinbase to start using the platform. The requests ranged from giving details about the current (and past) occupation and salary to highlighting if users have cryptocurrencies in other digital wallets.
In the Privacy section of the official website of the company, Coinbase admits that bank data is a requirement. Among this information, Coinbase highlighted the bank name, account type, routing number, the account number itself, and transaction history.
The company will request this data only to the extent necessary to comply with its legal or contractual obligations. In addition, they keep saying that they are subject to the US Bank Secrecy Act (BSA).
Besides, the company also talks about requesting essential data such as names, dates of birth, nationality, sex, utility bills, photographs, phone numbers, ID, passports, driver’s licenses. They also need other necessary data to comply with their legal obligations under financial or anti-money laundering laws.
They would even ask to inform about the transactions that take effect in the exchange’s services, such as the recipient’s name, the sender’s name, and the amount.
Although the company did not clarify that everything was part of the KYC requirements, a lot of the information displayed by Christanto got validated on the same Coinbase website.
Harsh Criticism in Networks
On Twitter, many users shared their discomfort with the new procedures and described it as exaggerated since these procedures can take up to at least three days while they got completed in a few minutes before.
One user explained that Coinbase, one of the publicly traded exchanges, caused retail to be influenced by the FOMO (Fear of Missing Out), which led to the creation of new accounts, and now, cannot trade with other people due to the KYC requirements.
Another user questioned the exchange by saying that either it is the most irresponsible KYC exchange on the planet, by not activating load balancing servers, or it is doing it deliberately on purpose, to prevent people from setting a liquidation in their profits.
Another went further and recommended moving away from Coinbase and other centralized exchanges, such as Binance and Kraken, as they will get hacked or they will hand over the data at any given time.
By: Jenson Nuñez
