KYC Requirements are Making ICOs Riskier Instead of Providing any Safety

Nishanth Shetty

Nishanth Shetty

February 13, 2018 11:50 am

KYC Requirements are Making ICOs Riskier Instead of Providing any Safety | Coindelite News
4784 Total Views

ICOs will be Riskier rather than Secure through KYC Requirements

Initial Coin Offerings (ICOs) were open to everyone, so, the gaining entry to ICOs has become more difficult. Due to the regulatory attention from the SEC, crypto startups have started asking for KYC requirements, but now it has become a risky place. The hackers are trying to hack the data of ten of thousands of investors.

KYC Requirements are an Accident which is going to Happen

Last year, it was easy to open a bank account rather than participating in ICOs because the U.S Securities and Exchange Commission went after a number of ICOs those failed to perform due to the diligence to ensure their investors did not recognize from the U.S driven partially by a desire to avoid criticism or shutdown from the SEC, ICOs have taken things to the opposite extreme through Know Your Customer procedures to isolate the investors from the U.S., China, and a handful of other countries. Until now, all of 2018’s major Crowdsales have required some sort of KYC in order to gain admittance to their whitelist, with many outsourcing the task to third parties that specialize in such matters.

In order to get considered for a token sale, it is now very common for everyone to submit a passport scan, bank statement, and various other documents and to answer few questions regarding their backgrounds and the origin of their cryptocurrency. For example, Legolas, for example, requested the investors to provide as much detail as possible about the origin of the BTC for being whitelisted for a token sale is no guarantee of participation either. Oversubscribed ICOs such as Arcblock returned Ether to hundreds of participants who had failed to contribute in time or who were considered to have “cheated” by using the prescribed gas limit. Twitter traders now encourage investors to submit KYC to as many promising ICOs as possible, just in case they later decide to participate.

KYC will be Good for ICOs, Bad for Investors

It is really hard to find the success rate for ICO whitelist applicants. At least half of the time, participants submit their personally identifiable documents in exchange for nothing, The likelihood of that data being leaked is low, but cumulatively, over the course of dozens of KYC applications, those odds start to mount up. It only takes one failure to expose an individual’s data once and for all time. Email and wallet addresses can be changed; passports and driving licenses are permanent.

Getting approvements to participate in pre and public sales are now seen by many true ICO participants as a game. The price of admission is the time it takes to complete the KYC registration process and the chance that none of the countless ICOs they apply to will suffer a catastrophic data breach. As if investing in ICOs wasn’t risky enough, KYC requirements have ironically made Crowdsales even more hazardous.

Russian Blockchain Association is Launching ‘First’ Guarantee System For ICO Funding

First Guarantee System for ICO Funding to be launched by Russian Blockchain Association According to the reports, the “first” guarantee system for Initial Coin Offering (ICO) is all set to launch in Russia in 2018. The system will be called as ICO-hub, is developed by Globex Bank, which is a …

State Bank of India warned its Customers instead of Banning the Credit Card Crypto Purchases

SBI Warns Credit Card Crypto Buyers instead of Banning them from Buying it. SBI Cards & Payments Services Pvt. Ltd, which is known as the second largest credit cards issuer in India, has warned customers about the risks associated with cryptocurrencies. Even though after warning, the bank did not ban …

Australian University to Introduce Nation’s First Blockchain Courses

Australian Students to learn Blockchain Courses in the University Australian public research university RMIT introduced the country’s first dedicated online short course on blockchain technology. The development of blockchain as a disruptive, game-changing technology has driven Melbourne-based RMIT University to offer Australia’s first online course on the sector. The 8-week …

-->

Pin It on Pinterest

Shares
Share This