Bitfinex and Bittrex come up with stringent KYC norms in wake of regulatory pressure
Two of the leading names in the crypto world, Bitfinex and Bittrex have been taking a relatively stern and serious approach towards clients after their recent travails with the regulatory authorities, according to a report by The Block.
Bitfinex which has been embroiled in an ongoing duel with the New York Attorney General has been actively locking accounts as it seeks the necessary information from certain users. In one such incident, two days ago, one user shared an email from Bitfinex on Reddit in which the firm asked the client to share additional information about his account, including “a clear and detailed explanation of … activity and objectives.” In addition to this, the exchange also asked the user to produce a government-issued ID an image of him holding the photo ID.
This incident brings to fore the extra care taken by the exchange in order to deter any illicit or fraudulent behavior and it comes after the exchange was issued a court notice by the New York Attorney General’s office which accused the firm of comingling funds in order to cover up a loss of nearly $850 million.
Replying to this Bitfinex’s chief technology officer Paolo Ardoino said it is nothing new and the exchange has been enquiring about such things even before the NYAG launched its enquiry.
Ardoino outlined threats such as money laundering, suspicious wallets, users residing in non-permitted jurisdictions, and suspicious activity profiles that led to such an inquiry and it has been going for quite some time.
Ardoino reiterated the fact that these procedures have been going on from the beginning. He said, “We always performed these procedures since the beginning of Bitfinex and we are always working hard to improve our controls in place and this goes back much beyond the NYAG inquiry.”
Following suit another crypto exchange, Bittrex has asked its customers to fill up a compliance form with personal information to keep using the services of the exchange, according to a Twitter user who posted the form. The form includes details about proof of employment and retirement income as well as verification of transactions. It is important to note here that this latest measure comes in wake of the decision by the New York Department of Financial Services to haul up Bittrex which was denied the Bitlicence to operate in New York.