The European Union recently voted in support of the KYC requirement in crypto. Following the decision, Roger Ver has warned crypto users of the risks involved in this new development.
According to him, KYC requirements put every crypto user at risk. He further stated that when an exchange is hacked and KYC info is leaked, thieves know exactly who the crypto whales are and where they live, making them unsafe in their very own homes.
The KYC requirement in cryptocurrency nullifies the sole purpose of a decentralized system. Just like banks and any other centralized financial system, it could be hacked. This is why most crypto users prefer decentralized blockchains because their privacy and security are guaranteed. Implementing the KYC rule in the crypto space means they are no longer in total control of their data.
Although the KYC policy was introduced to reduce the use of crypto for illicit activities and to enhance accountability for digital assets, it also permits the government to monitor users’ finances. If a user is suspected of illegal acts, his assets could be confiscated.
Several leaders in the crypto industry have rejected this proposal as they believe it to be anti-innovative and against privacy. Faryar Shirzard, the chief policy officer at Coinbase, issued a warning about crypto transactions if the KYC rule is implemented. He mentioned that all transactions might be logged and stored someplace, and huge transactions would be automatically reported to authorities even if there is no cause for suspicion.
Many crypto users have expressed their displeasure at this new proposal as they consider it unsafe. If an exchange gets hacked, and customers’ info gets to the public domain, it poses a huge security risk to crypto users because they could lose all their investment and they could be robbed or attacked in their places of residence.