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We are giving away our personal data all the time to pizza restaurants, hotels, various delivery services, and stuff, and then, all of a sudden, when it some to gambling sites, it becomes a problem.
But at the same time, these services do not know about our savings.
Suppose you won $1 million, and the data on your place of residence, your identification data fell into the hands of criminals. Would you have peace of mind about your safety?
I was thinking about it when writing that post. For those who won $1 million, or even $100k, it could be the reason for concerns. But those are rare cases, and most people don't win such money, and yet they are afraid of passing KYC on gambling sites. Also, I personally think that even if you won some big money the probability of your identification data falling into the hands of criminals is very low because the data is encrypted and are there only for the authorities if they have a proper warrant.
There is no proof that the data is truly encrypted like you said and you are not even working there to confirm this claim, the encrypted part is based on make-believe, I am not saying all of them are like this but we can't confirm this claim of yours when we have no proof, and the possible involvement of the authorities is why the majority of gamblers don't want to pass KYC verification on online casinos, it is why some gamblers prefer using privacy crypto for gambling instead, they are trying to stay away from the authorities, their data is their life.
For any Casino that is under the law of any jurisdiction, or being regulated by authorities of any jurisdiction, I can say that I believe its a sham when any of such casinos tell us that user's data are encrypted, I do not believe it at all.
But even if truly, users data is encrypted as they claim, the encryption may likely be against scammers and hackers, not against the authorities, for I know that casinos will remove any encryption when it is requested for by the authorities.