BitShares Decentralized Exchange Gateway CryptoBridge Makes KYC Mandatory for Users

CryptoBridge, the decentralized exchange arm of BitShares in an announcement on October 1st made it compulsory for its users to comply by Know Your Client (KYC) verification.

As per the new announcement, all existing and new customers would have to submit a government identification to start deposit and withdrawal from the exchange.

The recent announcement also noted that they had to comply with the 5th EU Anti-Money Laundering Directive (AMLD5). However, the firm also assured that they are planning to challenge the International financial regulation and stated,

“While we still strive to present new challenges for international financial regulation, we are facing the 5th EU Anti-Money Laundering Directive (AMLD5) and will adjust our gateway services to pave the way for CryptoBridge moving forward.”

Can AMLD5 implementation create concerns for privacy

The introduction of AMLD5 would definitely help the registers in monitoring the exchange on its various security offerings, which would eventually contain any cases of fraud and scam. Although the firm has assured that they won't be able to access any of the KYC data, and it would be handled by GDPR-compliant partner Fractal.

Although exchanges often claim to keep a distance from sensitive personal info of it's customers, still it does not guarantee the safeguard of the data from misuse by the third party. This was evident from the Binance hack, where a hacker got hold of personal user info on Binance by hacking into the KYC data of the third party handlers. The hacker asked for a ransom, otherwise, he would start leaking the data after a deadline.

The hacker did leak a ton of user data on a telegram group after Binance refused to entertain the demands of a ransom in bitcoin.