Failure to complete KYC on cryptocurrency exchange.

[FinCent]

Hey, I have been buying crypto (ETH and BTC) of an regulated exchange similar to (kraken, binance, coinbase) for a good number of years. Transfering it to my own cold wallets and other exchanges to diversify the risk of a single entity failing/Getting hacked. Inn the In the recent months i transfered some 180-300 k worth of crypto from my cold wallet trough the exchange where i bought my crypto and futher to another exchange.

But now several weeks later i get an email from the exchange where i bought most my crypto. Asking me for documents related to "Enhanced due diligence" and the large volume of transactions. I assume they are asking for source of funds, bank statements, tax documents, and crypto transaction history.

I currently have no crypto on this exchange, and i no longer plan to use it. I have all the documentation to document the source of funds for about 90-95% (Some is invetibility lost trough time and poor transaction history of exchanges). And this crypto is all reported on my tax statement. Problem is i really don`t want to send highly senstive finiancial documents to third party KYC company the exchange has hired do their due diligence (Exposed to potentially corrupt low wage emoplyees). Or being part of a large centralized database of KYC information just waiting to be hacked (Leading to my identify being stolen down the line) Unless i absolutely have to.

So my question is: Are there any potential consequences if i do not respond to their KYC request. Besides my account being locked/banned and being restriced from using their services?

 

[void]

don't overthink it - you're in a good position
just politely say that you're not willing to share information you consider sensitive and move on
they lost a customer.... period

 

[Sols]

If you do not respond, they may end up submitting a SAR (Suspicious Activity Report). Usually, though, anything that would yield a SAR should be caught pre-transaction, not post. It's more likely that you have reached some cumulative limit and in order for the next trade to run smoothly, they are requesting KYC in advance. If that's all it is, refusing should not cause any problems.

However, as long as you continue to cash out similar sums of money, you will keep running into this problem. As an alternative, you can use smaller OTC desks. It might cost more since most OTC desks add a margin on top of the best exchange rates they can find on the market. But if you're more comfortable with a smaller company having your KYC as opposed to a large exchange, that's an option.

 

[jafo]

Hey, I have been buying crypto (ETH and BTC) of an regulated exchange similar to (kraken, binance, coinbase) for a good number of years. Transfering it to my own cold wallets and other exchanges to diversify the risk of a single entity failing/Getting hacked. Inn the In the recent months i transfered some 180-300 k worth of crypto from my cold wallet trough the exchange where i bought my crypto and futher to another exchange.

But now several weeks later i get an email from the exchange where i bought most my crypto. Asking me for documents related to "Enhanced due diligence" and the large volume of transactions. I assume they are asking for source of funds, bank statements, tax documents, and crypto transaction history.

I currently have no crypto on this exchange, and i no longer plan to use it. I have all the documentation to document the source of funds for about 90-95% (Some is invetibility lost trough time and poor transaction history of exchanges). And this crypto is all reported on my tax statement. Problem is i really don`t want to send highly senstive finiancial documents to third party KYC company the exchange has hired do their due diligence (Exposed to potentially corrupt low wage emoplyees). Or being part of a large centralized database of KYC information just waiting to be hacked (Leading to my identify being stolen down the line) Unless i absolutely have to.

So my question is: Are there any potential consequences if i do not respond to their KYC request. Besides my account being locked/banned and being restriced from using their services?

There are NO mutes in prison! NEVER EVER!

*IYKYK

 

[JohnLocke]

You might get used to having to document your funds on crypto exchanges. It's becoming the standard from now on and nobody escapes it as soon as it's about larger amounts.

 

[JackAlabama]

Hey, I have been buying crypto (ETH and BTC) of an regulated exchange similar to (kraken, binance, coinbase) for a good number of years. Transfering it to my own cold wallets and other exchanges to diversify the risk of a single entity failing/Getting hacked. Inn the In the recent months i transfered some 180-300 k worth of crypto from my cold wallet trough the exchange where i bought my crypto and futher to another exchange.

But now several weeks later i get an email from the exchange where i bought most my crypto. Asking me for documents related to "Enhanced due diligence" and the large volume of transactions. I assume they are asking for source of funds, bank statements, tax documents, and crypto transaction history.

I currently have no crypto on this exchange, and i no longer plan to use it. I have all the documentation to document the source of funds for about 90-95% (Some is invetibility lost trough time and poor transaction history of exchanges). And this crypto is all reported on my tax statement. Problem is i really don`t want to send highly senstive finiancial documents to third party KYC company the exchange has hired do their due diligence (Exposed to potentially corrupt low wage emoplyees). Or being part of a large centralized database of KYC information just waiting to be hacked (Leading to my identify being stolen down the line) Unless i absolutely have to.

So my question is: Are there any potential consequences if i do not respond to their KYC request. Besides my account being locked/banned and being restriced from using their services?

leave and forget it. Nothing will happen. You might not even have had to read the email and assume it having been spam/junk/phishing.
I treat banks in the similar way occasionally since i have many backups.