CryptoBridge, a gateway for decentralized exchange BitShares, announces that as of this month its users will have to undergo mandatory identity checks.
BitShares Decentralized Exchange (DEX) gateway CryptoBridge announced on Oct. 1 that it has implemented mandatory user Know Your Client (KYC) verification.
European regulation is responsible
Per the announcement, the reason for the upcoming mandatory KYC is the 5th EU Anti-Money Laundering Directive (AMLD5). Interestingly, CryptoBridge also noted that the company wants to challenge international financial regulation:
“While we still strive to present new challenges for international financial regulation, we are facing the 5th EU Anti-Money Laundering Directive (AMLD5) and will adjust our gateway services to pave the way for CryptoBridge moving forward.”
Because of this policy change, all CryptoBridge users are required to submit to identification before continuing to use deposits and withdrawals. According to the platform, the measure is meant to “protect customers and CryptoBridge from being held responsible for any illegal intentions or money laundering activities.”
Data safety and privacy concerns
The company also notes that the introduction of the AMLD5 regulation creates legal status for crypto assets, “enables them to become viable and legitimate financial networks” and facilitates the listing of security tokens on the platform. Lastly, the firm reassures the users that it won’t have access to users’ KYC data, which will be managed by its GDPR-compliant partner Fractal.
Users are increasingly concerned over sharing their data with third parties, especially sensitive data such as the documents required to perform KYC checks. As Cointelegraph reported in August, Binance fell victim to a hacking scandal that saw the miscreant gain possession of a huge chunk of the firm’s KYC data.