Crypto Exchange Changelly Can Withhold Privacy Coins Due to “High Risk” KYC Concerns

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Monero (XMR) users have been complaining after finding out that cryptocurrency exchange Changelly can effectively “steal” their cryptocurrency. Changelly has been accused of requiring KYC documents after funds leave the wallet according to a tweet from September 4, 2018.

Fans of the Privacy-Based Coins Profiled for “Suspicious Activity”

According to reports, some Monero (XMR) users have been disappointed after finding out that cryptocurrency exchanges like Changelly have the ability to effectively rob users’ cryptocurrency.

Privacy coins, such as Monero (XMR), ZCash (ZEC), Horizen (ZEN), have been surrounded with controversy since their beginnings, with critics within the community saying these assets directly enable money laundering and have called for more regulation.

Changelly, a Prague-based cryptocurrency exchange, has been the go-to trading platform for Monero. However, in the past few months, the platform has seen an increase in complaints coming from its users, especially those trading in the cryptocurrencies mentioned above.

A Reddit thread from April 2018 details the problems the platform’s users faced when trading in Monero, with users calling the new rules regarding KYC and AML implemented by the startup “draconic.”

According to the post, the platform requested personal information from users whose transactions it deemed “suspicious” and withheld their funds until such information was provided.

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Responding to the accusations, a spokesperson from Changelly said that they only ask for KYC “only if the transaction is detected as suspicious,” and added that a warning about the transaction being subject for KYC check will pop up before the final step of the transaction.

Changelly Won’t Budge

The complaints about Changelly withholding funds from its users didn’t stop there. A twitter user addressed the issue in a tweet, warning others to be “careful with Changelly and privacy coins.”

A response from the official Changelly Twitter wasn’t long overdue, with the company saying that it always warns users about the possibility of KYC and asks to check the box to agree with our AML policy before any deposit. “Our risk management system doesn’t mark all transactions out of the blue,” a spokesperson for Changelly explained.

“Monero is the crypto that hides a sender and recipient thus making transactions untraceable. This [is] a reason why big amounts of other currency got to be checked [sic] before [it’s] converted to XMR.”

While the spokesperson made it clear that all funds are immediately released once cleared of anything suspicious, the company failed to clarify how the accounts are singled out for additional checks.