I’ve noticed something strange. A lot of exchanges require KYC to withdraw funds, and that's okay. But they still let users deposit money even if their KYC isn’t completed. That’s where the issue begins.
Then, when users want to withdraw their cash, they find out they can’t! Why is that happening?
Why let people deposit before they finish the KYC process? They claim it’s for legal reasons, but does the law actually say that? Feels a bit off to me.
Many exchanges tend to bury the KYC details in their Privacy or Usage Policies, and a lot of people only realize this when they try to withdraw their money!
In my opinion, these exchanges are just trying to boost their trading volume without caring about their users’ interests.
Hope I posted this in the right spot. If not, let me know where to go. And sorry if my translation is a bit off!
They'll probably answer you with some statement like : "We have described that deposit doesn't require KYC but withdrawal does, here and there, so the fault is in our customer". I know several exchanges who did this, and sadly they don't even give notifications when users are trying to deposit that if they wish to withdraw they have to do KYC first.
Unless there's public information about their team, it's not really that bad. The bad news is when the exchange you use doesn't have any public info, therefore it's almost impossible to sue them. And in the end, you lost your money. There's no one will help in this case, so let's be wary and only use exchanges that don't look suspicious.
Most exchanges I've seen requiring KYC to withdrawal either only do that when they think there is something wrong (fraud, they just want to know if the money is clean, etc...), if you want to surpass a withdrawal limit of X BTC or whenever they feel the need to do that (the problem on trusting a centralized third-party).
That's why depositing is always enabled at first. They can only see a problem with your account after you deposit it (i.e the amount or origin of the money is shady). For example, I've used Binance multiple times without any issue or needing to do a KYC verification. But today I've seen a thread from a user who got his withdrawals disabled after depositing 1 BTC. It's not always the same case for everyone.
I have noticed also that kind of issues in some exchange sites, but I don't want to name it here. We can simply avoid that kind of possible problem through research first before deposit our funds on which exchange we would like to do trading.
Probably one of their strategies that we must pass the KYC before having withdrawals or just to have a limit of Bitcoin to withdraw.
As what I have stated above you must do research first on which exchange that doesn't have full KYC and has any public info. regarding their services and to withdraw your fund.
Ok no problem with KYC These laws
but why exchanges Allow Deposit (money not clean!) come to exchanges Basically
the problem Victims of this movement People are having problems with KYC like unEinglish ID For example
Even you are less than withdrawal limit (Some exchanges there no withdrawal limit ) Like OKex
Yes this is what I am do before using any service or exchange
How would they know if the money is clean or not if the user haven't deposit yet? What I meant is that it's easier to just allow every deposit and control only the withdrawals (which is when they can create a profile of the user or check where the money came from or if it was a suspicious amount). They don't even require KYC to every user. I myself never had to do any verification on my exchanges.
4 years ago, I trade on poloniex and bittrex , they are the most trustable exchange I've ever known.
I can withdraw anytime without KYC verification. For some reason , I stop trading over 2 years and I want to withdraw the rest of the balance left, they asking me to give them the KYC.
Maybe the different between you and me is you're still new and still not aware that most exchange nowadays require KYC
Poloniex went completely downhill since 2 years ago. I and all my friends used them because they were the top 1 exchange.
However, now no one I know uses them anymore because they decided to require KYC from every single one of their users. Most exchanges actually don't require KYC for everyone (Binance being the biggest one), and if they do, it's only on a few specific cases. But Poloniex actually made it mandatory for everyone, regardless of the amount being traded or withdrawn.
we are talk about exchanges require KYC (withdrawal limit = 0 btc for all users not completed kyc )
However allow deposit everyone Even They did not complete kyc
not users they have Problem With sources of funds (These special cases)
It's not would be better allow deposit only for users completed kyc To avoid the problem In this exchanges ??
Thanks for your interaction
Maybe they allow deposits because you could be in a hurry to do a trade or sell your coins like it's all about not ruining the first experience with the exchange.
Create an account -> Deposit -> Trade; When you have time, do the KYC and withdrawal. Instead of having to wait hours or days to start trading in that exchange (due to being a new account and requiring KYC).
There are many cases of users unknowingly depositing to exchanges that require KYC for withdrawals of any amount. I'm sure it's there somewhere in the terms and conditions but if they had any respect for people they would close deposits until you were verified.
I'll guess they partially depend on the subscription model of enough people forgetting or refusing to verify so they get to keep a nice wee bonus.
I guess this is how those exchanges make more money by letting people make a deposit but not letting them to withdraw without a KYC approval yet. Somehow this the fault of costumer and owner. We should be wiser to pick an exchange next time because if they have to outsmart us we should be ready to withdraw everything if they started to do that.
I cannot say that they are the ones to blame here, I mean you do have time to research on your own on how their KYC works in their website. Other than that I know most of us are fully aware that KYC is now a standard requirement to all exchanges that even ShapeShift is requiring now so it comes to no surprise. People who are unaware thinks that this is a KYC trap but I think it is just their business strategy and showing up a KYC requirement early on might discourage a lot of potential customers signing up.
I guess they push to implement that having KYC on withdrawal in every client because of the law by the government or even before deposit your fund you must know which exchange reliable and reputed one that can we trust to pass KYC. I also tried that on Gate.io exchange when I'm come back after having a 1year break from trading and decided to withdraw my balance but it needs KYC.
There are several exchange like this. For example, Bitmart, BiteBTC, and so on. Make sure to not repeat it in the future, as sometimes they limit several countries so whatever you do you won't pass KYC if you're a resident of those countries.
From what I know KYC only tracks what is going out of the exchange as this is where the point of money laundering or tax evasion is taking place. The inflow (withdrawal) isn't some kind of requirement in any AML/KYC compliance so I wouldn't be surprised that some exchanges are doing this. For people who knows that KYC is really a requirement they won't be surprised if they were asked later but for people who really wants to avoid KYC they will feel trap in this kind of manner, perhaps you are part of the latter so you are complaining right now.
In the stock exchange at least on where I live our KYC and personal info is updated annually where I have to print, sign, and then scan a lot of documents before I even access my account. Compared to your situation now I think that mine is a way bigger burden as I have to do it every year. I know some laws and requirements look hard but it is for us.
Explicitly this is logical and true Maybe this is actually a reason to Attract users Good point.
True, unfortunately There is no any respect for people the Strong exchanges that Consider their users
may there be better solutions to solve the dilemma
Actually this is true almost Services and exchanges require KYC Even Decentralized Services !
But we hope to find solutions for such people at the same time The mistake also from the users themselves
Because they do not understand the Privacy Policy or Usage Policy
It is incredible They want to trade and Do not know this basic information
That is one issue I have with exchange services because it means they are not dong business with the utmost sincerity. It should be expressly stated that when you deposit, you wont be able to withdraw without meet these certain conditions and anyone who still go ahead would have been aware of what he is entering into but not with the deceit we are having now. The reason is not far fetched though because even in corporate world especially the banks, they would encourage one to open accounts and deposit only to come with series of conditions needed before withdrawal can be allowed.
I guess that's what happens when KYC/AML requirements clash with business requirements.
On the one hand exchanges have to follow KYC/AML procedures, on the other hand they want to on-board their users as fast and easy as possible. Throwing KYC/AML requirements straight into your newly registered user's faces could drive them away and apparently KYC/AML only becomes relevant once money moves out of the exchange. So you keep that complicated, user-unfriendly stuff for later, once you already got the user's business and they have some proper incentive to follow your KYC/AML procedures ie. to get access to their money.
Kinda scummy, likely a dark pattern but whatcha gonna do. I think there are a handful of exchanges that verify your account before money can even enter the exchange, but those seem to be rather the exception.
I'm glad there are more of them nowadays, because these exchanges are the ones that provide a decent level of customer support. The exchanges that don't care and accept deposits right away always end up dealing with a lot of complaints from angry customers spamming their support desks. I'm certain that more than half of the complaints is related to KYC/AML (i.e. people not being able do cash out or frozen accounts).
On the other hand, people should know better by now. At one point every centralized exchange will ask you to verify yourself one way or another, so don't assume your exchange will grant you unverified withdrawals for ever.