KYC norms and its processes aren’t merely a hot topic, but are also lending many platforms in hot soup. The latest victim of data breach and theft is no other than the much celebrated platform for bitcoin futures, Digitex.

The Seychelles based derivative exchange has removed all KYC related services from its system after a major hack data leak that took place in March 2020. The event has been officially described as an insider job and a data leak by a disgruntled employee. At stake are 8,000 users, whose government IDs and personal information is said to have been shared.

The KYC leak was done by someone with the identity ‘Digileaker’, who claims to possess the entire KYC documentation of the exchange, from day one. The identity claimed to have used the exchange login to get unrestricted information to all users, such as their phone numbers, addresses, IP addresses, etc., obtained from passports and driver’s licenses.

Digitex was founded by Adam Todd, described as a no nonsense man, to offer Bitcoin futures at zero cost or fees. It shot into limelight after raising $5.2 million in mere 17 minutes. After the hack, the exchange reacted by completely removing all KYC elements from its website.

For Digitex, the only way to ensure there was no further breach was to remove KYC itself, even if it had any utility. For Todd, KYC is just a way for governments to keep tabs on traders and crypto users and figure out who owns how much or where the money is spent. The exchange had however adopted KYC earlier to restrict money laundering and US citizens from participating.

A couple of other exchanges have suffered some hacks in the recent past. In February, OKex and Bitfinex had a denial of service attack, and Coinhako suffered a sophisticated attack and had to reimburse customers.

A recent report from P.A. ID Strategies reveals that the majority of exchanges do not have sufficient background checks. While the security of personal data kept with exchanges remains uncertain, new KYC norms have been put into place with new regulation like the one announced by FATF. Among exchanges, the crypto-to-crypto exchanges aren’t very keen to track transactions.

In this scenario, focus is now on the decentralized KYC services, such as KYC.Crypto. The global service offered here requires KYC to be done only once. After that, the same profile can be shared with any participating exchange or platform at the click of a button. A single, universal KYC can save huge efforts and money spent complying with KYC norms today, and also keep all data very secure.

The burden of doing KYC can be alleviated with decentralized and globally available KYC. Online crypto platforms can also heave a sigh of relief as they do no longer have to store and ensure the safety of user data.

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