Changelly, a leading cryptocurrency exchange platform around the globe was recently accused by its users of holding their coins. The discussion on social media platform led to a movement propagating the boycott of the exchange platform.
Changelly was accused of scamming by its traders due to its new KYC policy. KYC was made mandatory for users making huge transactions which looked suspicious to the exchange platform. But due to its mandatory requirement, many users were unable to complete the transaction without sending their information to the platform. The coins were withheld on the platform, it was neither sent back to the users nor was the transactions completed.
This also led to the uproar in the crypto-community claiming that this policy is against decentralization and the foundation principle of cryptocurrency.
During an exclusive interview with AMBCrypto, Changelly has clarified all the question arising with respect to the controversy.
The cryptocurrency exchange platform said that they are initially an anonymous crypto exchange. They respect the principle of anonymity and their customers desire to keep their privacy. They also said:
“99.5% of the overall number of transactions on Changelly is processed anonymously. In certain cases, when it comes to large amounts of crypto exchanged into untraceable currencies, we require our users to pass a KYC procedure. The customer’s consent is requested via corresponding alert before the money is sent.”
They further add:
“If the KYC terms appear unacceptable for some reason, they can refuse making the transaction and sending money to Changelly. Currently, there are only a few transactions that have become the subject of KYC (less than 0.5% of the flow, as of writing). Most of those are processed successfully, without any occasions.”
The team explained the compulsory requirement of KYC while making a huge crypto exchange and their main reason for cryptocurrency boom. They said, ‘Cryptocurrency is a wonderful tool that disrupts traditional financial institutions. It naturally attracts too much attention from banks, large companies, startups, and investors.’
‘For this reason, European legislators shine the spotlight on cryptocurrency and amend their regulations and directives for that. Unfortunately, if we want mass adoption for crypto, KYC procedures become inevitable, since we live in an open society where anyone can track anything’, said the team.
“Changelly team is trying to strike the balance between users’ privacy and following the directives. Still, over 99,5% transactions on Changelly are processed anonymously.”
When asked whether there is a set benchmark on how much can be exchanged into untraceable currencies without the requirement of KYC, they said,”‘KYC checks take place quite rarely, and only for the very first time when a user exchanges money into untraceable currencies. In fact, there is no fixed amount required for KYC. The check depends on a range of factors, such as a user’s transaction history, destination wallet and even time when they initiate a transaction. There is a database of suspicious wallet addresses that may be linked to malicious activities. It is shared among other crypto services and trading platforms that run KYC.”
“For example, if a hacker attack takes place, and we detect a transaction using a suspicious wallet address, we may temporarily suspend that transaction until we have clear proofs of funds being exchanged.”
Changelly team even spoke about the accusation made by a Reddit user who claims that there was no notification regarding the requirement of KYC shown to users whereas the exchange platform claims otherwise. They said:
“We do have a notification that user sees before they send us money. This notification implies a box a user must tick. Without doing that, they are unable to perform a transaction.”
They further added:
“Previously, we had a simple notification on top of the screen. Eventually, it turned out to be not so informative, as some users continuously ignored that. So we decided to deploy an enforced checkbox in order to avoid such kind of issues.”
In addition, the team also provides a reason as to why Changelly has still not returned the coins to users who are not willing to provide their KYC details. They said, ‘Once a user checks the box, they must be ready to provide the required information. If not ready, they must refuse from sending money to Changelly.’
“If the information provided by a user is controversial or not provided at all, we consider the funds are obtained fraudulently and act as the last legal entity in the whole exchange process by halting the funds. This helps legal representatives investigate the issue and find the real money owner.”
The platform, in the end, talks about the controversy going on the social media platform. They said:
“The whole controversy that took place was initiated by people who didn’t provide information to meet our requirements. The details sent comprise controversial data and fake photographs which, unfortunately, are not considered to be a clean funds proof”
The post Changelly clarifies the scamming accusation made against the platform appeared first on AMBCrypto.