KYC is often the bane of many trader’s lives and is seen as a hindrance to the process of trading. In order to become KYC verified and have withdrawals on their way, many exchanges require a whole hoard of documents – often including what you had for breakfast two weeks ago – and this is a hassle. Finally, MyEtherWallet (MEW) has teamed up with Bity to allow its users to exchange up to $5,000 worth of crypto into fiat without needing to complete KYC – fixing a huge issue with the current global crypto markets.
The Blind Leading the Blind
Leading cybersecurity company Segasec recently conducted a study of Fortune 500 banks and how often they are targeted by hackers. Interestingly, MEW turned up as the most targeted by hackers compared to any of the other Fortune 500 banks out there. This surprising discovery has cast shadows over MEW and its security procedures. For now, MEW has managed to stave off the majority of these attacks, but with such a high volume of hackers trying to break in, it’s only a matter of time before one breaks down the door. Should a company so highly targeted by hackers really be dropping KYC procedures? It really does put MEW’s decision under the microscope.
The Positive Side of Dropping KYC
While it might be harder to recover any funds stolen if you don’t complete KYC, it could in fact save your other crypto stashes. Large swathes of hackers have stopped going after funds and instead are going after user data. As we saw with the recent Coinmama hack, only customer data was stolen, highlighting this shift in trends. If KYC is dropped for low-value transactions, there will be no additional information stored on the exchange’s or wallet’s servers, meaning when hackers come knocking, your personal data is safe – simply because it’s not there.
Most people use the same passwords and security answers for all of their accounts – a really bad practice by the way – so by completing KYC at a number of exchanges often puts all of your crypto holdings at risk, even if it’s on a completely unrelated exchange.
KYC Becoming Mandatory
Crypto regulations around the globe are mandating that KYC must be completed, and even decentralized exchanges (DEXs) are starting to follow suit. Last year, the world-renowned DEX ShapeShift started implementing KYC procedures, making its customers very unhappy. While it didn’t want to implement the KYC procedures, with the mounting police requests for data, it was simpler to do so than continue paying hefty fines.
So, if you’re looking to skip KYC on small value transactions, signing up to MEW might not be such a bad idea. Registration only takes a few minutes and you can unlock an entirely new world of methods of interacting with the Ethereum blockchain. Just remember to keep transactions below a $5,000 value to skirt around the KYC regulations.