Decentralized trading platform CryptoBridge has suddenly introduced strict KYC checks. Cryptocurrency traders who have not gone through the know-your-customer process are not able to access their funds. The exchange announced the new policy on October 1st, the same day the changes would come into effect.
CryptoBridge requires all existing and new users to submit their user verification before doing anything on the trading platform. This way the company wants to comply to the 5th EU Anti-Money Laundering Directive (AMLD5). The exchange won’t store data themselves, but uses Fractal. This company follows European General Data Protection Regulation (GDPR) rules.
CryptoBridge basically destroyed their own reputation with the KYC checks, as their decentralized aspect is now damaged. They try to soften the blow by referring to the legitimacy of the crypto market place and the possibility to list security tokens, but basically they are now locking away funds from users without giving them the option to remove it from the exchange.
Users who’ve been naughty in the cryptocurrency space, need to think again before they sign up for KYC and get their funds. Even though CryptoBridge doesn’t store your personal information themselves, they do keeps records of ownership. On top of that Fractal will have your personal information. As soon as a court order mandates the release of your data, it will be giving to the court immediately.
CryptoBridge and its history with scams
CryptoBridge has been an easy exchange to get a project listed. Many scams would list their coin on the exchange to create some legitimacy. Personally I’ve been active with masternodes for a while, and I’ve seen several scams come and go. Let’s see what will happen to the people behind for example DRIP, GIGA Coin and Condominium as soon as law enforcement goes after them.
Masternode projects are easy to deploy and made scammers lots of money. However, there are also successful stories about Proof-of-Stake coins, like DASH, Pivx and others. Being well informed and skeptical are qualities you should definitely hold high. These scams would put their coins on CryptoBridge while staying anonymous. After a while they’d dump the project and setup a new one. In addition the exchange was home to many trading bots, manipulating trading activity on the platform.
Also published on Medium.